These Sleeping Giants Are the Best Stocks to Buy Outside of AI

InvestorPlace08-29

Meet Luke Lango Key Takeaways: Consumer stocks like Nordstrom, Abercrombie & Fitch, Foot Locker, and Chewy reported positive sales growth and comparable sales, indicating consumers are still ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThese Sleeping Giants Are the Best Stocks to Buy Outside of AI\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-29 04:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/hypergrowthinvesting/2024/08/the-best-consumer-stocks-to-buy-outside-of-ai/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Meet Luke Lango\t\t\n\n\n\n\nKey Takeaways:\n\nConsumer stocks like Nordstrom, Abercrombie & Fitch, Foot Locker, and Chewy reported positive sales growth and comparable sales, indicating consumers are still ...</p>\n\n<a href=\"https://investorplace.com/hypergrowthinvesting/2024/08/the-best-consumer-stocks-to-buy-outside-of-ai/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FL","symbol_name":"富乐客","start_time":0,"source_url":"https://investorplace.com/hypergrowthinvesting/2024/08/the-best-consumer-stocks-to-buy-outside-of-ai/","article_id":"2463041138","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2463041138","pubTimestamp":1724876231,"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"The best consumer stocks could realistically rally more than 50% over the next two years, combining 30% profit growth and 25% multiple expansion.","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FL":"富乐客","AIQ":"Global X Future Analytics Tech ETF","LU1941712264.USD":"ALLIANZ PET AND ANIMAL WELLBEING \"A\" (USD) INC","XRT":"零售指数ETF-SPDR标普","BK4200":"专卖店","CHWY":"Chewy, Inc.","JWN":"诺德斯特龙","BK4122":"互联网与直销零售","LU1941712348.USD":"ALLIANZ PET AND ANIMAL WELLBEING \"AT\" (USD) ACC","BK4220":"综合零售","ANF":"爱芬奇","BK4548":"巴美列捷福持仓","BK4094":"服装零售","BK4547":"WSB热门概念","BK4585":"ETF&股票定投概念","BK4103":"百货商店","BK4588":"碎股"},"translate_title":"这些沉睡的巨头是人工智能之外最值得购买的股票","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ANF":1,"XRT":1,"JWN":1,"FL":1,"AIQ":1,"CHWY":0.9},"content_text":"Meet Luke Lango\t\t\n\n\n\n\nKey Takeaways:\n\nConsumer stocks like Nordstrom, Abercrombie & Fitch, Foot Locker, and Chewy reported positive sales growth and comparable sales, indicating consumers are still spending.\nConsumer stocks have lagged behind AI stocks due to rising interest rates, but this is expected to change as the Fed signals potential rate cuts.\nThe market anticipates eight interest rate cuts by the Fed into the summer of next year, which could lead to lower financing rates and increased consumer spending.\n\n\n\n\n\n \n\n\nWe’ve been pounding the table on AI stocks for a long time now, and we’re still pounding the table on them today. But they aren’t the only good stocks to buy in the market right now.\nWe’re also huge fans of consumer stocks at the current moment.\nToday, Nordstrom (JWN), Abercrombie & Fitch (ANF), Foot Locker (FL), and Chewy (CHWY) all reported positive sales growth and positive comparablesales. Consumers are clearly still spending. As such, the bull thesis on consumer stocks is pretty straightforward.\nBut while the stock market has soared since late 2022 on AI euphoria, even the best consumer stocks have noticeably lagged.\nThe Global X Artificial Intelligence & Technology ETF (AIQ) has essentially doubled off its late 2022 lows and rallied to all-time highs. Meanwhile, the SPDR S&P Retail ETF (XRT) has rallied less than 40% off its late 2022 lows and remains 25% off its all-time highs.\nWhy? Interest rates.\nAlthough stocks have risen since late 2022, interest rates have risen, too. This new bull market started in October 2022. At that time, the Fed Funds rate was 3%. Over the next nine months, the Fed hiked rates nine times to bring the Fed Funds rate to 5.25%.\nThis sharp rise in interest rates has crimped consumer stocks.\nAuto financing rates have gone up…\nBig-ticket financing rates have gone up…\nCredit card interest costs have gone up…\nMeanwhile, money has become more expensive and consumer spending has become more selective.\nBut that is all about to change.\nPowell to the Rescue\nFed Board Chair Jerome Powell signaled last week that rate cuts – not rate hikes – are coming.\nThe market is expecting the Fed to cut interest rates in September for the first time in this cycle, and then to cut interest rates again in November… and again in December… and again in January, March, May, and June of next year.\nAll told, the market is expecting the Fed to cut rates eight times into the summer of next year.\nThat means lower mortgage rates…\nLower auto financing rates…\nLower debt financing rates…\nLower credit card rates…\nAnd that, of course, means more consumer spending.\nMost of those aforementioned retailers who reported positive earnings trends also mentioned that inflationary pressures continue to fall. This is consistent with weak price survey data we’ve observed over the past few weeks and falling oil prices.\nSo… we’re getting resilient economic activity… and falling inflation pressures… ahead of what will likely be multiple rate cuts in the last few months of 2024.\nThat’s a recipe for a broad restrengthening of the economy.\nThe Final Word on Consumer Stocks\nConsumer spending has slowed meaningfully over the past two years and especially here in 2024 as higher rates have started to bite consumers. Throughout 2022, retail sales growth ran north of 5%. In 2023, retail sales growth slowed to about 3.6%. In 2024, the average retail sales growth so far has been about 2.5%.\nFor two straight years, the consumer has slowed.\nThat will change over the next two years. Lower rates will help reawaken the consumer and unlock accelerated retail sales growth. We see retail sales rising by more than 3% next year and possibly more than 4% in the year after that.\nAs consumer spending reaccelerates in 2025/26, consumer stocks should benefit from strong earnings growth. Earnings per share across the S&P 500 Consumer Discretionary sector are expected to rise 12% in 2025 and 14% in 2024, for nearly 30% growth over the next two years.\nAt the same time, consumer stocks appear cheap right now. The average earnings multiple across the S&P 500 Consumer Discretionary sector is currently 26X, versus a five-year average earnings multiple of 33X. In a friendlier rate environment, we could see consumer stocks trade at their average 33X earnings multiple, implying potential for ~25% multiple expansion in the next two years.\nCombining 30% profit growth and 25% multiple expansion, consumer stocks could realistically rally more than 50% over the next two years.\nThe best consumer stocks could rally more than that.\nAnd that is why we are extremely bullish on consumer stocks right now.\nClick here to check out a few of the top consumer stocks on our radar right now.\nOn the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.\nP.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSubmit\n\n\n\n\n\n\n\n Luke Lango\nEditor, Hypergrowth Investing\n\n\nMeet Luke Lango\nBy uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends.\n\n\n\n\n\t\t\t\tLearn more about Luke\t\t\t\n\n\n\n\n\nArticle printed from InvestorPlace Media, https://investorplace.com/hypergrowthinvesting/2024/08/the-best-consumer-stocks-to-buy-outside-of-ai/.\n©2024 InvestorPlace Media, LLC","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"Economic Data","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.4","shortVersion":"4.26.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2463041138"}