Market Overview

Credit Suisse's Top 10 Consumer Discretionary Stocks

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 500’s 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.

Here’s 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 company’s 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."

Posted-In: Analyst Color Long Ideas Sector ETFs Top Stories Analyst Ratings Trading Ideas ETFs Best of Benzinga


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