Credit Suisse's Top 10 Consumer Discretionary Stocks
The Consumer Discretionary sector has been on fire in 2015, and the Consumer Discretionary Select Sector SPDR ETF (NYSE:XLY) has gained 8.4 percent versus the S&P 500s 1.2 percent gain year-to-date. With the U.S. economy booming, 10 Credit Suisse analysts each recently picked their Consumer Discretionary stocks to buy in 10 different subsectors.
Heres a full list of the names they chose.
1. Apparel & Footwear: Hanesbrands Inc. (NYSE:HBI)
Analyst Christian Buss sees the company as a strong and steady cash flow generator with the opportunity to grow earnings via acquisitions and a mix shift toward premium products.
2. Autos & Auto Parts: Magna International Inc (NYSE:MGA)
Analyst Dan Galves believes the company will be a key beneficiary of increasing vehicle globalization and is confident that it can meet its 2017 revenue and margin targets.
3. Gaming & Lodging: Six Flags Entertainment Corp (NYSE:SIX)
Analyst Joel Simkins predicts that the company will be able to capitalize on its pricing power in coming years, and he also likes the robust 4.5 percent dividend.
4. Homebuilding & Building Products: Mohawk Industries (NYSE:MHK)
Analyst Mike Dahl sees continuing improvements to operating margins due to pricing power, cost controls and tailwinds from low oil prices.
5. Media, Cable & Satellite: Time Warner Inc (NYSE:TWX)
Analyst Omar Sheikh explains that if we were to strip out HBO at valuations of $30bn-$35bn, the rest of Time Warner is currently trading at 14x-16x 2016 PE, a material discount to Disney and Fox at ~18-19x.
6. Packaged Food: Mondelez International Inc (NYSE:MDLZ)
Analyst Rob Moskow thinks the company and its key brands will continue to benefit from the growing trends toward snacking in emerging market countries.
7. Retail: Broadlines & Department Stores: Costco Wholesale Corp (NYSE:COST)
Analyst Michael Extein calls the company one of the few conventional retailers that continues to deliver positive traffic, market share gains, and a validated model for international expansion.
8. Retail: Food & Drug: Dollar General Corporation (NYSE:DG)
Analyst Ed Kelly likes the companys strong comparable store sales growth, accelerating square footage growth, improving margin outlook and aggressive share repurchase strategy.
9. Retail: Hardlines: Home Depot Inc (NYSE:HD)
Analyst Seth Sigman views the company as a best-in-class retailer with a strong management team that participates in one of the strongest segments of retail.
10. Restaurants: Dunkin Brands Group Inc (NASDAQ:DNKN)
Analyst Jason West sees strong demand for westward expansion, which he believes is "the key to the DNKN story."
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