🗞 The Rise of Consumer Stocks (Open for Double-Digit Upside)

WHILE YOU POUR THE JOE… ☕️

Our Taiwan Semiconductor Manufacturing (TSM) shorts are having a big old party…

Especially since we pitched that play all the way back at $309 per share, and it’s not even close to getting into our exit target area yet. 📈 

Most of the Mag 7 names are falling straight into (and past) correction territory, a behavior that is dragging other risk assets (like Bitcoin) into bear markets. 🐻 

That’s not necessarily bad news, unless you only rely on technical analysis and hype for your ideas.

Today, we will cover why this AI trade unwind and risk-off sentiment is going to benefit some consumer discretionary names.

Such as La-Z-Boy (LZB), an opportunity we gave inside our WhatsApp Deal Room for over 30% returns in a single week. 🔥 

Or On Holding (ONON) for similar returns after a strong earnings announcement.

The point is this:

• $XLY names are going to outperform in the coming quarters

Because of this newsletter breakdown pointing to a dollar rally and other macro themes, our portfolio is carrying more consumer names lately.

The very same deals we give you in this Deal Room, with accompanying financial and valuation models for you to take home and learn how a professional trader operates.

The best part?

You can get 7 Days Free right now and still walk away with all our materials, even if you don’t choose to stay after that.

I’ll see you inside our Deal Room ✅ 

And speaking of opportunities in consumer stocks, let’s get on with today’s email 📧…

SOURCING OPPORTUNITIES
Digging Through Consumer Stocks

Our last newsletter broke down the themes happening in the Dollar index, and how this is leading us to turn bullish for the retail sector.

Specifically, there are some themes helping out this sector, some of which have been adopted and mentioned by Goldman Sachs in their latest research reports:

• Tax refunds are coming in the next quarter

• Dollar strength boosts consumer buying power and domestic business

• $60 billion in stimulus coming in 1H’26 plus a potential $2,000 tariff dividend

All of this money and increased buying power will likely trickle down to discretionary spending. 💵 

And that’s why we’re beginning to turn bullish on the space.

But wait, there’s more ⬇️ 

Price action, when understood, can be an important weapon for you.

No, I’m not talking about technical analysis.

The $XLY ETF has emerged from correction territory, much stronger and faster than the rest of the S&P 500 and AI names.

Even banks are struggling in correction with no bids to save them.

So I guess markets must be aligned with a view not that far from the ones we have developed for the discretionary sector here.

But, which industry specifically?

We can notice two outliers here:

1. Automotive retail and wholesale parts

2. Retail discount stores

This makes a lot of sense, since both industries are both defensive and exposed to better consumer dynamics during this future stimulus period and a stronger Dollar.

Connecting these dots to other data, like our PMI breakdown of the retail sector, showing you further strength in retail and wholesale, can make or break your trading career.

Specifically, this is a mental model (with hard-wired Excel models) we give you during Day 3 of our free 5-day email crash course on idea-generation —> stock selection —> portfolio construction and hedging.

Sign up for your first lesson today ✅ 

Automotive Stock Selection

Noticing the outliers makes your portfolio selection a lot easier, but you already know that from our free email crash course.

In a nutshell, here’s why I like Advance Auto Parts (AAP):

• Forward P/E of 18.3x vs the peer average of 16.7x

• Forward EPS growth of 57.5% vs peer average of 22.7%

• Mid-cap giving you a fantastic risk/reward scale in terms of resizing

And the best part, a forward PEG ratio of only 0.3x, meaning roughly 70% of this future EPS growth has yet to be priced into the stock.

Now we can see the conservative market views, in terms of EPS, beginning to get left behind with actual EPS figures beating these estimates to create a much higher ceiling for this stock.

There will be some more filtering in this company to figure out whether it is actually a good buying opportunity. 👀 

Specifically:

• Deep financial modeling and analysis

• Valuation target ranges & themes

• Hedging opportunities

You can get the entire work delivered to you in just two simple steps:

1. Sign up for a 7-Day Free Trial of our WhatsApp Deal Room ✅ 

2. Join the chat and receive all current deals and weekly analysis

Now, what if we’re wrong about $AAP and this bullish bias?

We can go back to the highlighted O’Reilly Automotive (ORLY) and notice a few themes helping us create a hedge:

• Forward PEG of 2.7x, suggesting a potential overvaluation scenario

• Forward EPS growth rate of only 11.1% vs peer average of 22.7%

• Large-Cap stock going ex-growth scenario, our favorite for short hedges

There will be a long/short equity model made on this setup, delivered to our Deal Room members as well, so make sure you grab your free trial and get exposed to this potential opportunity.

I’ve given you the foundation for a trade, and our next newsletter will provide another worthy name to look at in the retail space.

In the meantime, you can bask in the glory of a 4.2% rally in shares of Meta Platforms (META) since we mentioned it in our last newsletter, as a name to benefit from a stronger Dollar theme in the future. 🎯 

Until then.

To your success,

G 🫰 

GO AND MAKE IT HAPPEN
Raw Upside

There’s a reason we’re going heavy into retail and consumer discretionary names.

You know the reasons now, so let’s talk about some results:

• $LZB stock is rallying over 30% in a single week

Our Deal Room members got that signal days before the massive spike, saving themselves hours and hours of work and research.

But, just in case you’re curious as to exactly why I liked the stock at $29.50…

Here’s an entire breakdown showing you the reasons why this was a screaming buy (and still might be) ⬇️ 

To your success,

G. 🥃