• This article will look at two of the weekly stock picks from TheBull.com.au.
• This week will cover two discretionary spend stocks.
• On the surface, a specialty retailer and a vehicle leasing company are not connected, yet both are benefitting from the economic conditions of today.
Universal Store Holdings Limited ASX:UNI (UNI) and SG Fleet Group Limited ASX:SGF (SGF) are two east-coast Australian companies listed on the ASX.
Top Australian Brokers
Unemployment in Australia is at a historic low of 3.5%, with a high participation rate of 66.8%. The tight labour market is driving wage inflation. The latest figure from the Australian Bureau of Statistics (ABS) is wage growth of 3.3% in the last 12 months. With jobs and climbing pay packets, many have money to spend outside of the essentials. Currently, companies like UNI and SGF are well-positioned to channel this extra spending money.
Universal Store Holdings Limited ASX:UNI (UNI)
UNI is a promising investment opportunity for several reasons. Firstly, the company specializes in casual fashion and accessories. This specialism caters to the youth market, a demographic is known for its spending power. UNI is therefore an attractive proposition for investors looking for exposure to a growing market.
The company was listed in November 2020. This indicates its growth potential and commitment to expansion.
UNI’s financial performance is impressive, with a total group sales of $145m AUD in the first half of the fiscal year 2023, up 34.5% from the prior corresponding period. These statistics demonstrate a strong upward trajectory and reflects the company’s ability to adapt to changing market conditions and consumer preferences.
UNI’s Stockopoedia rank of 97 out of 100 suggests that it is a top-performing business listed on the ASX. The steady rise in the company’s share price since its listing is also a positive sign for investors.
In summary, UNI is a well-managed and profitable business operating in a growing market segment.
SG Fleet Group Limited ASX:SGF (SGF)
SG Fleet Group Limited (ASX: SGF) is a promising investment opportunity due to several key factors. SGF provides motor vehicle fleet management and salary packaging services across Australia, New Zealand, and the United Kingdom. SGF’s global spread indicates a diversified revenue stream, and allows them to weather any economic downturns or market volatility. This makes it an attractive proposition for investors seeking a stable investment.
Recent changes to the fringe benefits tax for electric and low-emission vehicles in Australia have made it more attractive to lease rather than buy these vehicles, benefiting SGF’s business model.
There is an expected increase in demand for SGF’s services following global the shift towards environmentally friendly vehicles.
SGF represents a good opportunity, with a value ranking of 93 out of 100 on Stockpedia. The forecast fully franked dividend yield of 7.9% iis also an attractive feature for investors seeking income from their investments.
SGF’s ability to adapt to changing market conditions and strong financial performance make it a sound investment choice for investors who may be looking for long-term growth.