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Your instant 5-share Consumer Discretionary portfolio

Possibly the widest selection of companies on the ASX are housed within the broad Consumer Discretionary sector. For this reason it’s a particularly important sector for investors to follow and keep abreast of. To make comparing all the Consumer Discretionary stocks easier, the sector is broken-down into five industry groups. These are:

  • Automobiles & Components
  • Consumer Durables & Apparel
  • Consumer Services
  • Media
  • Retailing

A scan through each industry group reveals a number of companies which could make appealing additions to a diversified portfolio, here are a few which stand out.

Within the Automobiles & Components industry is ARB Corporation Limited (ASX: ARP) which manufactures and retails car accessories such as bull-bars. ARB has a superb track record of producing long-term shareholder gains – over the past five years the stock is up nearly 320%. When it comes to quality, ARB is up there amongst the best.

Despite Consumer Durables and Apparel appearing to be an unusual spot to find a manufacturer of caravans and transportable accommodation, nevertheless that is exactly where Fleetwood Corporation Limited (ASX: FWD) will be found. The company’s share price is at a multi-year low due to the effects of the slowdown in the mining sector however the stock could now be in value territory.

The Consumer Services group is home to some great companies including Domino’s Pizza Enterprises Ltd. (ASX: DMP) and Flight Centre Travel Group Ltd (ASX: FLT). It is also where you will find Ainsworth Game Technology Limited (ASX: AGI) – a designer and developer of gaming machines for the gambling industry. The firm’s outlook for growth is strong and while its shares don’t look cheap, the stock does appear to represent growth at a reasonable price.

While many companies in the Media industry can be considered growth stocks there are also some appealing dividend plays. Prime Media Group Limited (ASX: PRT) operates television broadcasting services across parts of regional Australia. With the shares trading at 98 cents and the company forecast to pay dividends totalling 7.6 cents per share in FY 2015, shareholders are getting a forward dividend yield of 7.75%, making Prime an appealing income stock.

Lastly, but certainly by no means least is the Retailing industry. One exciting opportunity currently available here is David Jones Limited (ASX: DJS). The department store owner and operator has just received a takeover offer priced at $4 per share. With the shares trading at $3.91, assuming the takeover eventuates then investors could earn a 2.3% takeover arbitrage profit from buying stock today.

5 stocks under $5

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*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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