Forget Myer Holdings Ltd and buy these 3 retail shares

Premier Investments Limited (ASX:PMV) shares are one of three in the retail industry which I think could have strong upside potential over the next couple of years…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Although there are a lot of retail shares such as Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings Ltd (ASX: MYR) that I would avoid right now, I believe there are still some great investment options in the industry.

Three retail shares which I think could be in the buy zone today are as follows:

Noni B Limited (ASX: NBL)

Through its eponymous Noni B brand, W Lane, Table 8, and BeMe, this retail company serves the middle-aged women's fashion market. I believe this is a great niche to operate in at present due to Australia's ageing population and the fact that its target demographic is arguably less likely than others to shop online. The retailer has had a strong start to FY 2018 and looks likely to build on FY 2017's impressive result. At just 16x trailing earnings I think Noni B is worth considering.

Premier Investments Limited (ASX: PMV)

Although I'm not a big fan of its struggling core brands, the fast-growing and high margin Peter Alexander and Smiggle brands have been able to offset the weakness. These two niche brands now account for 40% of total company sales and this is likely to grow to an even greater portion in the future. Management expects Smiggle's sales alone to exceed $400 million by FY 2020 thanks to its global expansion, representing growth of 67% on FY 2017. Similarly, Peter Alexander's sales are forecast to grow to over $250 million during the same period. This will be an increase of almost 31% on FY 2017's sales.

Super Retail Group Ltd (ASX: SUL)

Super Retail is the company behind brands such as Supercheap Auto and Rebel Sport. While the arrival of Amazon in Australia will be a challenge for the company, I believe management has worked hard to prepare for this eventuality and is well placed to compete and build on its strong start to FY 2018. So with its shares trading at 11x trailing earnings and providing a trailing 6.1% yield, I think it could be a good option in the industry.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Premier Investments Limited and Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »