Tuesday, August 27. Tongwen Huang Guoyingjun prematurely said that the consumer market is free to compete
It is not like the technology company has a considerable first-mover advantage, so be careful when selecting stocks. The winners will have a big difference.
This introduction just shows the organic focus of the US retail industry under the “Amazon effect.” That is not only because the operators who can break through in the most difficult industries are extraordinary, but it is worth mentioning that such survivors who are weak and strong in the competition are in the US stocks with high overall valuation. Called the value of choice, insight into its great potential and dare to bet, rich returns can be expected. In fact, Target (NYSE code TGT), Home Depot (NYSE code HD) announced its quarterly results, the stock price soared, the former rose more than 20% in a single day last Wednesday, the US retail stocks turned into a one-time Good news.
Exceeding color vs overjoyed
Old Bi did not see this foresight, and the benefits of Yun Yun can not be talked about, but there are still a lot of US stocks including the investment experience of the consumer sector is worth sharing, may lead to the same resonance.
At the end of October last year, the US stock market fell in the fourth quarter. In order to strengthen the defensive power of the portfolio, the Brazilian iron ore merchant Vale (Vale, NYSE ADR code name and company name) and other high-risk shares were pulled out. On the one hand, the main force of the cash was transferred to P&G (code name PG). The original intention was that the stock was stable. However, after 10 months, Vale’s share price fell more than 30%, but P&G rose nearly 40%. This change, avoiding the loss of Vale, although it is “executive color”, is also in line with the original thinking of adjusting the combination, but such “door-watching” shares of P&G actually outperformed the market into a street (the index rose only about the same period) 8%), that is the real joy.
Winning and winning
The reason for “selling positions” on the day was simple, but did not delve into industry and company data. From the beginning of May, I happened to see the report of Yardeni Research, a US research institution, on different sectors of the US stock market. It was discovered that the PEG (P/E ratio to earnings growth ratio) based on the profit growth factor was calculated in the 10 sectors. (excluding real estate), the overall PEG of consumer staples is as high as 3.3, which is almost the same as 3.5 of the public sector. At the other end of the pendulum, the consumer discretionary overall PEG is only 0.6, the same as the energy, Qi Qi in the 10 major plates to stay in the last seat.
With PEG 1 as a reasonable valuation level, it is also a consumer stock. P&G and other non-essential consumer sectors are on a daily basis, while the latter includes Target, Best Buy (code BBY) and Dollar General (code DG). A type of US physical retailer.
At the time of reading this report, Lao Bi has completed the change of horses. Procter & Gamble accidentally became the “love stock”. Subjectively, Yardeni felt that the daily consumer goods stocks were unreasonably expensive, and they did not take it for granted. In retrospect, physical retailers such as Target, Best Buy, and Dollar General have repeatedly demonstrated the ability to deliver better-than-expected earnings growth in a challenging business environment, which is of course related to Wall Street analysts playing a boat. But the “Amazon effect” makes the retail industry accelerate the survival of the fittest, which is equivalent to providing low-risk opportunities for investors who know how to buy in the competitive advantage.
The analysts are all red and white. Target was once regarded as the road kill where the Amazon giant went, and only the “waiting for death” points. The opposite is true. The company announced last week that the adjusted second-quarter earnings per share reached a record high of $1.82, and online sales surged 34% year-on-year. The management also added a full-year profit forecast. As soon as the performance came out, the Wall Street Bank raised the Target 12-month target price one after another, and the response was fast, and it was not too much to sing.
It can be seen that the so-called Amazon Effect does not mean that all affected enterprises will sit still. The real effect of Amazon on the retail sector is to create winners and losers in the consumer industry. Once the value of the strong is revalued, Target will rise by 20% in a single day. The lens is not difficult to repeat in the management of the same outstanding opponents.
Expect a knife to saw a big tree
Target’s share price has risen sharply, and the value rate has dropped accordingly, but the aforementioned Best Buy and Dollar General both announced their quarterly results on Thursday. In the two, Dollar General relies more on imported goods, and the US will impose more tariffs on China. However, Best Buy and Dollar General are both “Amazonian” survivors, and the potential for surprises in performance cannot be underestimated.
In order to verify this point of view, the old stocks bought a buyout option that Best Buy expired on September 20 and exercised a price of $70 after the US stock market opened on Tuesday (the Best Buy was made at $68.56). See if you can saw a big tree with a knife.