Key insights
- The author suggests consumer discretionary stocks, specifically TJX and SharkNinja, as alternatives to the crowded AI trade. They argue these companies demonstrate pricing power and cater to a wide range of consumers, even in an inflationary environment. SharkNinja's international expansion is also seen as a bullish catalyst, given faster growth in other countries. This suggests continued strength in consumer spending, potentially supporting US equity valuations.
I’m having a look at consumer plays who show durability and a wide range of consumers. Companies like $TJX and $SN have put up ridiculous numbers the last few years, even in the inflationary environment. I believe that companies will continue to raise prices more than they raise wages, which is bullish for the consumer goods “picks and shovels plays.” I think both brands do a good job of catering to all income classes. And SharkNinja is expanding internationally which I think is bullish because there are many countries around the world growing at a much faster clip than the US. All of the TJ Maxx’s and Marshall’s around me are packed as whenever I’m in there. And you can find some great deals.
Where are you looking?