QVI Stock Picks Review | Winter 2024 | #2
Quality Value Investing's consumer discretionary sector updates on TJX, NKE, WSM, DKS, PAG, and AMZN.
Summary:
In this updated coverage, QVI reviews its consumer discretionary sector picks: The TJX Companies, NIKE, Williams-Sonoma, DICK’S Sporting Goods, Penske Automotive Group, and Amazon.
The post includes updates to QVI’s checklist research and analysis of each company’s current wealth and the stock price’s present value.
Any changes in my view (buy, hold, or sell) are reflected in the QVI Concentrated and Expanded Stock Picks Real-Time Performance Trackers.
When referencing this report, premium (paying) subscribers can access their Quality Value Investing (QVI) Glossary of Investing Terms and Metric Targets. Unless noted, all data presented is sourced from Seeking Alpha Premium as of the market close on January 19, 2024, and intended for illustration only.
In this series, Quality Value Investing reviews the QVI Real-Time Stock Picks by sector to update each holding’s performance, current wealth, and present value.
Today’s post reviews QVI’s consumer discretionary sector picks: The TJX Companies, Inc. (NYSE: TJX), NIKE, Inc. (NYSE: NKE), Williams-Sonoma, Inc. (NYSE: WSM), DICK’S Sporting Goods, Inc. (NYSE: DKS), Penske Automotive Group, Inc. (NYSE: PAG), and Amazon-com, Inc. (NASDAQ: AMZN).
Company Current Wealth
To uncover the current wealth of each company, QVI defines the value proposition, measures returns on management, and assesses enterprise downside risks.
Value Proposition
QVI’s value proposition section defines the competitive advantages of a company’s products or services to its customers compared to the industry, including the stock’s historical performance vs. the sector and market.
Value Proposition Elevator Pitches
The TJX Companies has superior inventory management, a powerhouse global buyer network, and consistent financial performance.
NIKE's Swoosh is the moat, and it's as wide as the logo is famous.
Williams-Sonoma's high-quality brand and growing omnichannel storefronts remain favorites among an affluent and loyal customer base.
DICK'S Sporting Goods is the primary sporting goods retailer in its local markets and often the only game in town.
Penske Automotive Group is a favorite among customers and employees if it is underfollowed by investors. With its highly competitive value proposition, Roger Penske’s fabulously run, enduring enterprise stands out in the crowded automotive marketplace.
Amazon enjoys retail market dominance, including the ever-growing reliance of large businesses on AWS, consumers and small businesses on Prime, and authors and book buyers on KDP.
Performance vs. Sector and Market
The chart below illustrates each holding’s performance against the Consumer Discretionary Select Sector SPDR® Fund ETF (NYSE: XLY) and the SPDR® S&P 500 ETF Trust (NYSE: SPY) since May 23, 2017, when QVI’s first sector holding, TJX, was added to the Concentrated Stock Picks.
Five of the six consumer discretionary holdings, WSM +400.90%, DKS +329.10%, PAG +308.90%, AMZN +216.00%, and TJX +179.70%, have outperformed the sector and market with significant alpha from total returns during the coverage timeframe.
Only NKE +107.80% has underperformed in the sector and market during the same period, albeit the stock has beaten the S&P 500 by 854 basis points (bps) since being added to the QVI Stock Picks on June 6, 2017.
Next, we’ll look at each company’s returns on management and enterprise downsize risks and each stock’s present value, including shareholder yields, valuation multiples, and share price downside risks. The post concludes with the updated views exclusive to Quality Value Investing’s premium (paying) subscribers.
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