Go Cheap or Spend Lavishly?
The retail sector is showing some strong results as pent-up consumer spending is showing some encouraging signs of release. Yet, as a retail sector investor, do you stick with the discount and big-box stores, or should you invest your capital in high-end retailers?
The key is to buy the retail stocks that show growth along with the economic recovery, whether they are big-box stores, discounters, or luxury retailers. Investors want growth.
On the cheap end, I favor the leading discount bellwether retail stocks, as I feel consumers will continue to look for bargains regardless of the improving market conditions.
This includes large-cap stocks Wal-Mart Stores, Inc. (NYSE/WMT), Target Corporation (NYSE/TGT), and Costco Wholesale Corporation (NASDAQ/COST).
For added growth, you should look at the smaller discount companies in the retail sector.
With superior growth to Costco, small-cap PriceSmart, Inc. (NASDAQ/PSMT) operates 29 warehouse clubs in 12 countries in Central America and the Caribbean.