Big box retailers are on deck to report earnings next week, including Home Depot (HD), Walmart (WMT), and Target (TGT). Zacks Investment Management Client Portfolio Manager Brian Mulberry and Main Street Research CIO James Demmert join Yahoo Finance Live to discuss their latest stock trades regarding retailers and luxury brands, including LVMH (MC.PA) and Tractor Supply Company (TSCO).
Stocks to Buy
"These companies, like Walmart, that continue to generate an enormous amount of cash flow have that capital to reinvest in themselves organically and grow," Mulberry says on the interest rate environment for large retail chains. In the fashion world, luxury brand consumers that are attracted to LVMH tend "to be pretty consistent through all kinds of economic climates," Demmert discloses. Tractor Supply Company is driven by this "incredible move by millennials to the outer, more rural parts of the country," Demmert comments. Home Depot is being driven by post-pandemic trends where consumers, similarly to the beginning of the pandemic, homeowners are investing back into their space with renovation projects, encourage by housing market trends.
Stocks to Avoid, Sell
Compared to Walmart, Target has had "a difficult time managing their inventory, and they now have a new problem where they just acknowledged that they have over $500 million worth of shrink or theft coming out of the stores, Mulberry says.
