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TJX Companies Inc. (The) (TJX)
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Aritzia Inc. Subordinate Voting Shares (ATZ)
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Abercrombie & Fitch Company (ANF)
Would you be a buyer in the cons. discretionary sector at this time? Any suggestions?
Also between ANF TJX and ATZ which would you prefer to buy at this time? Or would you not buy either ?
Regards
Rajiv
We believe that with the potential for interest rates peaking and an expansion in the business cycle, consumer discretionary can outperform several other sectors in the market. Historically consumer discretionary has been highly reflexive to changes in the economy, and with many indicators suggesting that an economic trough could be near, we feel discretionary names can outperform.
In the consumer discretionary space, we like DOL, DOO, and ATD.
Between ANF, TJX, and ATZ, we would be most comfortable with TJX at this time given its larger size, better historical performance compared to ANF and ATZ. We would also be comfortable with ANF due to its recent momentum and cheaper valuation, although its share price has been somewhat flat over the past 20 years. ATZ we like, however, its recent momentum has not been great, and it is sorting through some issues. We would prefer to wait to see how its operations improve before entering this name.