6 Stocks Hispanic Consumers Could Drive Sky-High This Fall

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O’Reilly Automotive

This is a great consumer stock to own, as consumers will want their vehicles in top shape for the fall. O’Reilly Automotive Inc. (NASDAQ: ORLY) is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. The company sells its products to both DIY and professional service provider customers.

Its product line includes new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, temperature control, chassis parts, driveline parts and engine parts; maintenance items, such as oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives and appearance products; and accessories, such as floor mats, seat covers and truck accessories.

The report said:

O’Reilly has 25% of stores in Texas and California, and while the market fears structural issues, we believe the slowdown seen thus far is more driven by weather and cyclical factors. The company noted that the third quarter is off to a “strong” start.

The $248 Jefferies price target compares with the consensus target of $227.70. Shares traded early Wednesday at $197.80.

Ulta Beauty

If there is any stock to own in the retail sector, this may be the one, and the Latina customer is very important for sales. Ulta Beauty Inc. (NASDAQ: ULTA) is a holding company for the Ulta Beauty group of companies. The company offers cosmetics, fragrance, skin, hair care products and salon services. It offers approximately 20,000 products from over 500 beauty brands across all categories, including its own private label. The company also offers a full-service salon in every store, featuring hair, skin and brow services.

Ulta Beauty operates approximately 970 retail stores across 48 states and the District of Columbia and also distributes its products through its website, which includes a collection of tips, tutorials and social content. The company offers makeup products, such as foundation, face powder, concealer, color correcting, face primer, blush, bronzer, contouring, highlighter, setting spray, shampoos, conditioners, hair styling products, hair styling tools and perfumes.

The Jefferies price target is a stunning $350. The consensus price objective is $318.32, and shares were last seen at $232.20.

Walmart

This giant retailer has done very well since bouncing off lows for the year in January. Wal-Mart Stores Inc. (NYSE: WMT) operates retail stores in various formats worldwide, including discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, restaurants, apparel stores, drug stores and convenience stores. It also operates via retail websites, such as Walmart.com and SamsClub.com.

Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2016 revenue of $482.1 billion, Walmart employs approximately 2.2 million associates worldwide.

The analysts noted:

Wal-Mart didn’t specifically cite weakness in Hispanic spend on their latest call, but ~20% of store locations are in states where over 1/3 of the population is Hispanic Texa, Californian and New mexico and an improvement in spend could help comps. According to IntelliBev and NPD group, nearly 1 in 3 C-Store transactions is made by a customer of Hispanic descent.

Shareholders receive a 2.55% dividend. Jefferies has a $93 price target. The posted consensus target is $82.37. Shares traded at $80.30.

Foot Locker

This athletic shoe retailer has been hammered and may be offering the best entry point in some time. Foot Locker Inc. (NYSE: FL) is a specialty athletic retailer that operates 3,419 stores in 23 countries in North America, Europe, Australia and New Zealand. It operates Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports, SIX:02, Runners Point and Sidestep retail stores, as well as direct-to-customer channels, including Eastbay.com, FootLocker.com and SIX02.com.

Foot Locker investors receive a 3.74% dividend. The whopping $61 Jefferies price target is well above the consensus target of $42.89 The stock traded recently at $33.90.

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All these stocks offer investors significant value at current trading levels. Any boost in Hispanic spending for the rest of 2017 could add to overall sales and revenues and drive stock prices higher.