Why these 3 retail shares are in my shopping basket

The Bapcor Ltd (ASX:BAP) share price is one of three in the retail industry which I think could climb significantly higher over the next 12 months. Here's why I think they are buys…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With low-cost operators and online behemoths aiming to steal market share from Australian retailers, I think investors are low on options when it comes to picking retail shares to invest in.

But that doesn't necessarily mean there aren't any quality investments to be made. Here are three retail shares which I think could be worth adding to your shopping basket:

Although the Bapcor Ltd (ASX: BAP) share price has rallied strongly since last year, at 25x trailing earnings I think the auto parts wholesaler and distributor's shares are still good value today. After all, thanks to the impressive performance of all its segments, the company delivered a stunning 44% increase in pro-forma half-year net profit after tax. Pleasingly I expect more of the same in the second-half. For this reason I would class Bapcor as a buy.

The Greencross Limited (ASX: GXL) share price may have gone sideways for the last 12 months, but I feel confident the long-term direction is up. With an estimated 63% of Australian households owning a pet, I believe Greencross is in a great position to profit thanks to its 164 veterinary practices and 237 retail stores throughout Australia. As well as growing organically, I believe the fragmented veterinary market provides the company with a significant opportunity to grow through acquisitions. At just 17x annualised earnings I think Greencross would be a great buy and hold investment.

The Premier Investments Limited (ASX: PMV) share price has fallen around 17% in the last 12 months despite being a rare highlight in a struggling retail industry. This could make it an opportune time to buy its shares in my opinion. In its recent half-year results the company reported a 10.6% increase in earnings before interest and tax to $93 million. A key driver of this growth was the company's fast-growing Smiggle brand. Smiggle's global sales rose 26.4% during the period, meaning the brand now generates 23% of total company sales. With its international expansion continuing to gather pace, I believe the second-half will be equally strong.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Premier Investments Limited. Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bapcor and Greencross Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »