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20 June
Validea's Top Consumer Discretionary Stocks Based On Peter Lynch - 6/20/2024

The following are the top rated Consumer Discretionary stocks according to Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.

HIBBETT INC (HIBB) is a small-cap value stock in the Retail (Specialty) industry. The rating according to our strategy based on Peter Lynch is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Hibbett, Inc. is an athletic-inspired fashion retailer. The Company operates approximately 1,169 retail stores in 36 states, composed of 960 Hibbett stores, 193 City Gear stores and 16 Sports Additions athletic shoe stores. Its Hibbett stores average 5,800 square feet and are located primarily in strip centers, which are usually near a chain retailer. Its City Gear stores average 5,200 square feet and are located primarily in strip centers. Its Sports Additions stores average 2,900 square feet with the majority located in malls and usually near a Hibbett store. Its store base consisted of 912 stores located in strip centers, 32 free-standing stores and 225 enclosed mall locations. It offers personalized customer service and access to coveted footwear and apparel from top brands like Nike, Jordan and Adidas. It maintains a full-line wholesale and logistics facility in Alabaster, Alabama (a suburb of Birmingham) where the Company receives and ships its various merchandise.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO:PASS
SALES AND P/E RATIO:PASS
EPS GROWTH RATE:PASS
TOTAL DEBT/EQUITY RATIO:PASS
FREE CASH FLOW:NEUTRAL
NET CASH POSITION:NEUTRAL

Detailed Analysis of HIBBETT INC

HIBB Guru Analysis

HIBB Fundamental Analysis

H WORLD GROUP LTD (ADR) (HTHT) is a large-cap growth stock in the Hotels & Motels industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: H World Group Limited, formerly Huazhu Group Limited, is a China-based investment holding company. The Company's main businesses include the operation of develop leased and owned, manachised and franchised hotels. The Company is mainly engaged in multi-brand hotel operation, covering the full spectrum of market segments with a portfolio of over 20 distinct hotel brands. The Company mainly conducts its businesses in the Chinese domestic market and the German market.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO:PASS
SALES AND P/E RATIO:PASS
EPS GROWTH RATE:PASS
TOTAL DEBT/EQUITY RATIO:PASS
FREE CASH FLOW:NEUTRAL
NET CASH POSITION:NEUTRAL

Detailed Analysis of H WORLD GROUP LTD (ADR)

HTHT Guru Analysis

HTHT Fundamental Analysis

STRIDE INC (LRN) is a mid-cap growth stock in the Schools industry. The rating according to our strategy based on Peter Lynch is 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Stride, Inc. is an education services company providing virtual and blended learning. It provides tech-enabled education solutions, curriculums, and programs directly to students, schools, the military, and enterprises in primary, secondary and postsecondary settings. It offers K-12 education for students, schools, and districts, including career learning services through middle and high school curriculums. For adult learners, it delivers professional skills training in healthcare and technology, as well as staffing and talent development. Its technology-based products and services enable its clients to attract, enroll, educate, track progress and support students. Its solutions address two markets: General Education and Career Learning. For both the General Education and Career Learning markets, it offers school-as-a-service offering, which includes an integrated package of curriculum, technology systems, instruction, and support services that it administer on behalf of its customers.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO:PASS
SALES AND P/E RATIO:PASS
EPS GROWTH RATE:FAIL
TOTAL DEBT/EQUITY RATIO:PASS
FREE CASH FLOW:NEUTRAL
NET CASH POSITION:NEUTRAL

Detailed Analysis of STRIDE INC

LRN Guru Analysis

LRN Fundamental Analysis

ERMENEGILDO ZEGNA NV (ZGN) is a mid-cap growth stock in the Apparel/Accessories industry. The rating according to our strategy based on Peter Lynch is 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Ermenegildo Zegna NV is an Italy-based manufacturer of high-end menswear and accessories. The Company focuses on producing different kinds of apparel, including outerwear such as jackets, suits, blazers, shirts, pants and jeans, as well as shoes, sportswear and accessories. The Company is active worldwide.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO:PASS
SALES AND P/E RATIO:PASS
INVENTORY TO SALES:PASS
EPS GROWTH RATE:PASS
TOTAL DEBT/EQUITY RATIO:FAIL
FREE CASH FLOW:NEUTRAL
NET CASH POSITION:NEUTRAL

Detailed Analysis of ERMENEGILDO ZEGNA NV

ZGN Guru Analysis

ZGN Fundamental Analysis

STARBUCKS CORP (SBUX) is a large-cap growth stock in the Restaurants industry. The rating according to our strategy based on Peter Lynch is 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Starbucks Corporations is a coffee company, which roasts, markets and retails specialty coffee in the world. The Company operates in 86 markets and has approximately 38,000 stores worldwide. It has three segments: North America, International and Channel Development. North America segment includes the United States and Canada. International segment includes China, Japan, Asia Pacific, Europe, Middle East and Africa, Latin America and Caribbean. North America and International segments include both the Company-operated and licensed stores. Channel Development segment includes roasted whole bean and ground coffees, Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino and Starbucks Doubleshot, foodservice products and other branded products sold worldwide outside the Company-operated and licensed stores. A large portion of its Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestle.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO:PASS
SALES AND P/E RATIO:PASS
EPS GROWTH RATE:PASS
TOTAL DEBT/EQUITY RATIO:FAIL
FREE CASH FLOW:NEUTRAL
NET CASH POSITION:NEUTRAL

Detailed Analysis of STARBUCKS CORP

SBUX Guru Analysis

SBUX Fundamental Analysis

Peter Lynch Portfolio

About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.