This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

"Great Bargains" In Store For Retail And Consumer Stocks In 2014: CIBC

Competitive pressures will challenge earnings but create buying opportunities

TORONTO, March 26, 2014 /CNW/ - After a two-year "rocket ride" for retail and consumer stocks, outsized returns will be hard to find in 2014 but there could be great opportunities for bargain-shopping investors, according to CIBC World Markets Inc.

"The past two years have been a rocket ride for Retail and Consumer stocks in Canada," says Perry Caicco, Equity Analyst at CIBC. "The TSX Staples Index has risen 53 per cent, and the Discretionary Index has risen 67 per cent, which is about three times faster than the overall TSX."

But the fuel for those increases, namely rampant M&A activity, real estate spin-offs into REITs and investor focus on stable cash-producing consumer names over resource stocks, has largely dissipated, writes Mr. Caicco in a note published for CIBC's Retail and Consumer Conference happening today in Toronto.

"2014 is shaping up to be a year of digestion and transition, as companies absorb acquisitions, shift strategies and rebuild their bases all while the competitive landscape remains on fire," says Mr. Caicco. "As a result, we do not see foresee outsized returns in the Retail and Consumer space this year, and have encouraged investors to focus on either high-growth companies, or more traditional companies where management is actively driving value."

He notes that earnings for many companies in the retail sector will be challenged this year due to a weak Canadian dollar, debt-conscious consumers, and square footage growth that has intensified competition and squeezed margins. "As quarters unfold, and as the challenges become apparent, multiples are likely to decline. But underneath it all, certain transition activities will begin to bear fruit and there could be some great bargains again among these stocks."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.44 -0.95%
GOOG $692.33 -0.84%
TSLA $232.32 -3.92%
YHOO $36.02 -1.40%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs