Favourable Household Expenditure and Capex Statistics Unfolding Prospects for Retail Sector

Investment Summary

Sector Overview and Supporting Catalysts

Data Insights and Analysis

Index Performance

Key Drivers versus Key Constraints

Investment theme and stocks under discussion (CGC, SHV)

After understanding the sector, let us now look at two companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the EV/Sales valuation multiple method.

1. ASX: CGC (Costa Group Holdings Limited)

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 1.14bn)

CGC is an Australia-based horticulture company. CGC is engaged in growing, packing, and marketing fruits and vegetables.

The stock has witnessed a dip of ~3.45% in last one month, and over the last six months, it has surged by ~12.50%. The stock has a 52-week low and 52-week high of AUD 1.930 and AUD 3.455, respectively and is currently trading below the 52-week high-low average.

2. ASX: SHV (Select Harvests Limited)

(Recommendation: Speculative Buy, Potential Upside: Low Double-Digit, Mcap: AUD 508.44mn)

SHV operates a fully integrated almond business consisting of orchards, primary processing, and secondary value-added processing under the Renshaw & Allinga Farms industrial brands.

The stock has witnessed a surge of ~10.77% in last 3 months, and over the last 1 year, it has declined by ~20.44%. The stock has a 52-week low and 52-week high of AUD 3.600 and AUD 6.620, respectively and is currently trading below the 52-week high-low average.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 30 March 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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