While the stock market is expected to remain volatile, investors who stay the course will be rewarded. Investors might consider adding retail penny stocks Carrefour SA (CRRFY) and Woolworths Holdings Limited (WLWHY) to their portfolios, which have significant potential. These stocks are rated an A, the highest in our proprietary rating system.
In February 2023, the ratio of job openings to job seekers decreased to 1.67, the lowest level since November 2021. It is a metric that policymakers have been closely monitoring amid their efforts to reduce the pace of job growth.
The cooling job market should push the Fed to pivot from its monetary tightening policy, which should help stocks soar.
Additionally, the COVID-19 pandemic has dramatically changed consumer behavior, and one of the most significant changes has been the rapid acceleration of online sales in the retail industry. According to Forrester, total retail sales are expected to reach $5.50 trillion by 2027, with online sales making up 30% of the market.
The growing use of technologies like Artificial Intelligence, Virtual Reality, and Augmented Reality, used to improve customers’ shopping experience is helping the market grow.
The Global Smart Retail market was valued at $24.20 billion last year and is expected to grow at a CAGR of 21% to reach $111.19 billion by 2030.
Take a look at the stocks mentioned above:
Carrefour SA (CRRFY)
Headquartered in Massy, France, CRRFY operates stores in various formats and channels in France, Spain, Italy, Belgium, Poland, Romania, Brazil, and Argentina. The company operates hypermarkets, supermarkets, convenience stores, cash and carry stores, e-commerce sites, and service stations.
CRRFY’s forward EV/Sales of 0.35x is 79.5% lower than the industry average of 1.69x. Its forward Price/Sales multiple of 0.16 is 85.6% lower than the industry average of 1.11.
CRRFY’s trailing-12-month asset turnover ratio of 0.59x is 86.7% higher than the 0.85x industry average. Its trailing-12-month ROCE of 12.80% is 20.9% higher than the 10.59% industry average.
CRRFY pays $0.11 annually as dividends. This translates to a yield of 2.72% at the current market price, compared to the 4-year average dividend yield of 2.74%. Its dividend payments have grown at a CAGR of 2.1% over the past three years.
During the year ended December 31, 2022, CRRFY’s net sales increased 11.6% year-over-year to €81.39 billion ($88.91 billion). Its net income increased 20.4% year-over-year to €1.57 billion ($1.72 billion), whereas its adjusted net income per share increased 10.9% year-over-year to €1.63.
CRRFY’s revenue is expected to increase 4% year-over-year to $92.77 billion during the fiscal year ending December 2023. Its EPS is expected to increase 12.5% year-over-year to $0.41 for the same year. Additionally, it has topped consensus revenue estimates in three of the trailing four quarters, which is impressive.
The stock has gained 41.7% over the past six months to close the last trading session at $4.08.
CRRFY’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade in Value and a B in Stability. The stock is ranked #11 in the 37-stock A-rated Grocery/Big Box Retailers industry.
Click here to see the POWR Ratings of CRRFY (Growth, Quality, Momentum, and Sentiment).
Woolworths Holdings Limited (WLWHY)
Based in Cape Town, South Africa, WLWHY operates a chain of retail stores in sub-Saharan Africa, Australia, and New Zealand. It operates through seven segments: Woolworths Fashion; Beauty and Home; Woolworths Food; Woolworths Financial Services; David Jones; Country Road Group; and Treasury.
WLWHY’s forward EV/Sales of 0.98x is 12.6% lower than the industry average of 1.12x. Its forward Price/Sales multiple of 0.83 is 1.8% lower than the industry average of 0.85.
WLWHY’s trailing-12-month EBIT margin of 8.9% is 14.7% higher than the 7.8% industry average. Its trailing-12-month net income margin of 5.76% is 26.4% higher than the 4.6% industry average.
While WLWHY has a four-year average dividend yield of 3.06%, it pays $0.17 annually as dividends. This translates to a yield of 4.57% at the current market price. Its dividend payments have grown at a CAGR of 13.3% over the past three years.
WLWHY’s revenue increased 12.1% year-over-year to ZAR35.86 billion ($2.01 billion) in the fiscal six months ended December 25, 2022. Its profit for the period increased 70% year-over-year to ZAR2.74 billion ($153.13 million). Also, its earnings per share increased 44.4% year-over-year to 215.8 African cents.
WLWHY’s revenue is expected to come in at $4.12 billion during the fiscal year ending June 2023.
The stock has gained 10.2% over the past nine months to close the last trading session at $3.74.
WLWHY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
WLWHY also has an A grade for Quality and a B in Value and Stability. It is ranked #5 in the same industry.
To access additional ratings for WLWHY’s Growth, Sentiment, and Momentum, click here.
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
Yes, some special stocks may go up like the ones discussed in this article. But most will tumble as the bear market claws ever lower this year.
That is why you need to discover the “REVISED: 2023 Stock Market Outlook” that was just created by 40 year investment veteran Steve Reitmeister. There he explains:
- 5 Warnings Signs the Bear Returns Starting Now!
- Banking Crisis Concerns Another Nail in the Coffin
- How Low Will Stocks Go?
- 7 Timely Trades to Profit on the Way Down
- Plan to Bottom Fish For Next Bull Market
- 2 Trades with 100%+ Upside Potential as New Bull Emerges
- And Much More!
You owe it to yourself to watch this timely presentation before placing your next trade.
REVISED: 2023 Stock Market Outlook >
CRRFY shares were trading at $4.02 per share on Wednesday morning, down $0.06 (-1.38%). Year-to-date, CRRFY has gained 21.45%, versus a 6.79% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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