Want a Bargain? Look at These Companies, Says CEO
FLAT is the acronym one CEO uses to recommend consumer-oriented sectors with growth potential to investors.
As investors look for bargains in the stock markets, and consumers look for deals that won't lighten wallets as much, Kevin O'Brien, president and CEO of Revere Data, suggests investors look into the food, living arrangement, apparel, and transportation sectors.
"We think there's a lot of talk in the marketplace right now about flights to quality—moving to gold and moving to Treasurys," he said. "We're seeing that if you look at these four very basic sectors, food and living and apparel and transportation, we think there are some really wonderful companies that are growing, producing solid earnings, and producing dividends in certain sectors."
In the food sector, investors should look into wholesale distribution companies and discount stores, such as Costco and BJ's Wholesale Club, he said.
Warehouse clubs posted a three-month return of 13 percent, while discount stores had a 7 percent return compared to the S&P 500 Index's return of -6.1 percent during the same period.
In the living arrangement category, O'Brien suggests looking for pockets of resistance, although the overall housing market has been negative. He recommends real estate investment trusts that focus on apartments.
For the apparel sector, O'Brien said he saw growth in discount retailers since consumers are looking for high-end brands, but are also willing to wait a season or two to snag some discounts.
As consumers drive their cars longer before buying new ones, there is growth in automotive parts stores, O'Brien said.
Support companies, such as Autozone , have benefited from this trend and will continue to do well, he added.
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Disclosure information was not available for Kevin O'Brien or his company.