Don’t overlook this promising ASX retail stock

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

Motley Fool writer/analyst Catherine Baab-Muguira owns no shares in any company mentioned in this article.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!