MENU

Should you buy these retail shares?

The retail industry certainly has been a tricky place to invest in over the last 12 to 24 months.

Weak consumer sentiment, low foot traffic, and changing consumer preferences have hurt some retailers, while others have continued to thrive.

With that in mind, I thought I would look at a few retail shares to see if there is an investment opportunity.

Are these three retailers in the buy zone?

Greencross Limited (ASX: GXL)

As well as operating a chain of veterinary clinics nationwide, Greencross has exposure to the retail sector through its Petbarn stores. I have been very impressed with the progress of its in-store veterinary clinic roll out. Retail stores with in-store clinics inside them reported a 7.5% increase in like-for-like sales growth in the first half of FY 2018. I expect more of the same in the second half as its roll out gathers pace and its loyalty program grows in popularity. So with its shares trading close to a 52-week low and at just 14x trailing earnings, I think now could be a good time to snap them up.

Reject Shop Ltd (ASX: TRS)

Long-suffering shareholders of the discount retailer will be delighted to see its shares trading close to a 52-week high at present. Reject Shop’s solid half-year result and bullish full-year guidance were behind this strong share price performance. In February Reject Shop provided FY 2018 net profit after tax guidance of between $16.5 million and $17.5 million, well ahead of last year’s NPAT of $12.3 million. Investors appear to believe the worst is over for the company, this could make it worth a closer look in my opinion.

Super Retail Group Ltd (ASX: SUL)

Whilst I am a fan of Super Retail’s Auto and Sport divisions, I’ve been very disappointed with the performance of its Leisure segment. Because of this, I was surprised to see the company add to the segment earlier this year rather than divest it. The Macpac acquisition could ultimately prove to be a master stoke by management, but until I have seen proof of this I plan to sit on the sidelines. Especially with its balance sheet looking quite stretched now.

Instead of Super Retail I would be buying these star stocks with enormous growth potential.

Top 3 Blue Chip Shares To Buy In April

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Greencross Limited. The Motley Fool Australia owns shares of Super Retail Group Limited. The Motley Fool Australia has recommended The Reject Shop 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.