Woolworths (ASX: WOW) dominates the headlines, alongside competitor Wesfarmers (ASX: WES), operator of Coles, Kmart and Target. Department stores David Jones (ASX: DJS) and Myer (ASX: MYR) represent other well known retail names and stocks.
However, for growth-minded investors, it's important to note that all these companies have fairly mature retail concepts and store bases. None will be expanding dramatically from here.
That's not the case with The Reject Shop (ASX: TRS), an Australian discount retailer at a far earlier stage in its growth cycle. This chain of discount stores saw sales grow by nearly 12% in the first half of the year and opened 17 new stores during the same period.
With the company still only a little more than halfway to its planned total number of stores, TRS shares look relatively inexpensively priced, trading for less than 1 times sales, about 17 times earnings, and on an EV to EBITDA basis of about 10.
The Reject Shop's position as a discount retailer also means the stores are less likely to be affected by wavering consumer confidence levels – making the shares an excellent counter-cyclical play in the event of a recession.
Looking for even more promising investment ideas? If you love fully franked dividends, then grab your FREE copy of this valuable investment report, "The Motley Fool's Top Dividend Stock for 2013-2014." You'll discover The Motley Fool's favourite income idea for 2013-2014! Just click here to claim your FREE copy.
More reading
- 3 dividend stocks you can buy now
- For growth and dividends, you can't beat this stock
- Buy stocks now, while they're cheap!
Motley Fool writer/analyst Catherine Baab-Muguira owns no shares in any company mentioned in this article.
