The performance of consumer discretionary businesses is closely linked to economic cycles. Thankfully for the industry, demand trends seem to be healthy as discretionary stocks have gained 6.1% over the past six months. This performance has nearly mirrored the S&P 500.
Nevertheless, this stability can be deceiving as many companies in this space lack recurring revenue characteristics and ride short-term fads. On that note, here are three consumer stocks we’re swiping left on.
Market Cap: $62.34 billion
Founded in 1919, Hilton Worldwide (NYSE:HLT) is a global hospitality company with a portfolio of hotel brands.
Why Are We Cautious About HLT?
Hilton is trading at $259.10 per share, or 32.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why HLT doesn’t pass our bar.
Market Cap: $6.64 billion
With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE:CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.
Why Are We Hesitant About CHH?
Choice Hotels’s stock price of $144.19 implies a valuation ratio of 20.2x forward price-to-earnings. Read our free research report to see why you should think twice about including CHH in your portfolio, it’s free.
Market Cap: $41.32 billion
Established in 1906, CBRE (NYSE:CBRE) is one of the largest commercial real estate services firms in the world.
Why Do We Avoid CBRE?
At $132.80 per share, CBRE trades at 23.3x forward price-to-earnings. If you’re considering CBRE for your portfolio, see our FREE research report to learn more.
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.