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Highlights
- Investors targeting long-term gains can explore consumer stocks like Maple Leaf (TSX:MFI) and Goodfood (TSX:FOOD).
- Some players from the discretionary space like Sleep Country (TSX:ZZZ) and Leon’s Furniture (TSX:LNF) saw profit growth in their latest quarter.
- The S&P/ TSX Capped Consumer Staples Index grew by approximately two per cent in 2022.
Investors targeting long-term gains can explore consumer stocks like Maple Leaf Foods (TSX:MFI) and Goodfood Market (TSX:FOOD) as demand for their products is evergreen.
The S&P/ TSX Capped Consumer Staples Index grew by approximately two per cent in 2022, while The S&P/ TSX Capped Consumer Discretionary Index sank by about 14 per cent this year.
However, some discretionary players like Sleep Country Canada (TSX:ZZZ), Leon’s Furniture (TSX:LNF), and Richelieu Hardware (TSX:RCH) saw increased profit in their latest quarter despite inflation.
On that note, let us explore some discounted TSX consumer stocks.
1. Sleep Country Canada Holdings Inc (TSX: ZZZ)
The mattress company posted a year-over-year (YoY) increase of C$ 24 million in its revenues to C$ 207 million in Q1 FY2022. Notably, the small-cap company saw its net profit at C$ 18.4 million in the latest quarter, a YoY jump of 111.8 per cent.
Stocks of Sleep Country Canada dropped by nearly 20 per cent in 12 months and rose by over 11 per cent from a 52-week low of C$ 24.5 (May 4). ZZZ’s Relative Strength Index (RSI) value stood at 53.26, according to the EODHD/Others data.
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2. Leon’s Furniture Limited (TSX: LNF)
Leon’s Furniture recorded a net profit of C$ 56.5 million in Q4 FY2021, marking a YoY jump of C$ 3.2 million or six per cent. The company said that it remains ‘cautiously’ optimistic about its sales growth and profitability depending on COVID effects and consumer behaviour.
LNF stock plummeted by approximately 10 per cent in six months and had an RSI value of 23.65 on May 6, as per EODHD/Others findings.
3. Richelieu Hardware Ltd (TSX: RCH)
Richelieu Hardware’s sales rose to C$ 384.46 million in Q1 FY2022 compared to C$ 297.58 million in the first quarter a year ago. The C$ 2-billion market cap firm recorded an increased net income of C$ 30.3 million in the latest quarter compared to C$ 21.04 million in Q1 2021.
RCH stock lost about 19 per cent in 12 months. Its RSI value stood at 25.36, as per EODHD/Others.
4. GoodFood Market Corp (TSX: FOOD)
GoodFood Market continued to grow as a modern online grocery company with the launch of its one-hour delivery in Ottawa in April. The food company also partnered with different vendors to provide grocery items to consumers.
FOOD scrip dipped by over 74 per cent YoY. The grocery scrip has broken various support levels since its 52-week high of C$ 10.885 on August 10, 2021, and was nearly 82 per cent down from it.
5. Maple Leaf Foods Inc (TSX:MFI)
Maple Leaf Foods said that its sales increased seven per cent to C$ 1.12 billion in the first three months of FY2022 compared to 2021. However, the food company posted a decreased net profit of C$ 13.7 million in the latest quarter compared to C$ 47.7 million in Q1 2021.
MFI stock swelled by almost two per cent in a year and held an RSI value of 28.12 (as per EODHD/Others) on May 6.
Bottomline
Investors can explore the TSX stocks mentioned above, which belong to companies that generally pass on cost pressure to consumers to maintain their profitability. However, inventory and supply chain challenges can impact their businesses.
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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
