- Investing in the sectors that are showing relatively greater strength than the broader market is a good move.
- Reece is an ASX-listed bathroom, kitchen, plumbing supplies company which marked a new high of AU$20.58.
- Baby Bunting’s share price has been making an all-time high for last few days, touching a level of AU$6.34 today.
The ASX 200 has done pretty well this year, clocking a decent gain of 6.2% YTD return (as of 21 April 2021), not bad for a benchmark index. However, a few sector-specific indices have outperformed the index hands down. One such index is the ASX 200 consumer Discretionary Index (ASX:XDJ) which is up by 11.2% (as of 21 April 2021).
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Investing in the sectors that are showing relatively greater strength than the broader market is a no brainer when it comes to selecting the best sector to invest. However, to choose a few stocks out of many in the chosen sector could be a difficult decision.
In Technical analysis, one of the most renowned parameters to handpick stocks that are in a bull run, is to go through the list of all-time high makers. Stocks clocking all-time highs from the outperforming sectors is a good recipe for successful investing. Having said that, let’s have a look at three such stocks from the retail sector.
- Reece Limited (ASX:REH)
Reece is an ASX-listed bathroom, kitchen, and plumbing supplies company, which has been consistently rising in a one-sided trend since March 2020' low. Continuing the upswing, the company’s share price marked a new high of AU$20.58 today.
Investors have been aggressively buying Reece’s shares this year partly due to solid half year results declared in February. For the six months ended 31 December 2020, the company reported a 4% increase in sales revenue to $3,074 million and a 12% increase in normalised EBITDA to $349 million. Positively, with the housing market booming in Australia, demand for its offering looks likely to strengthen in the second half as well.
- Baby Bunting Group Limited (ASX:BBN)
Baby Bunting’s share price has been making fresh all-time highs for last few days. Today its shares marked a high of AU$6.34. The catalyst behind the strong surge was an impressive performance during the first half coupled with its expansion plans. In respect to the former, the baby products the company delivered a decent 16.6% increase in total sales to AU$217.3 million.
This strong performance was driven by a 15% increase in comparable store sales and a massive 95.9% increase in online retail sales. The retailer recorded a 43.5% increase in net profit after tax to AU$10.8 million as the gross margins expanded by 41-basis points. Baby Bunting is now planning to open its first physical store in the country in FY 2022, as part of expansion plans.
- Adairs Limited (ASX:ADH)
Adairs’ share price reached a record high of AU$4.97 today. The stock has been on a tear since mid-April, delivering a return of 26.5% since 12 April. Investors have been buying shares of this homeware retailer as the company delivered a very strong performance in the 1H FY21.
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For the six months ended 31 December 2020, its group sales increased 34.8% to $243 million, driven by a 20.9% increase in Adairs sales, a 44.4% jump in Mocka sales, and strong online sales growth. A significant expansion in its gross margin led the company to report a massive 166% increase in underlying EBIT to $60.2 million.