Consumer goods companies continue to appeal to me, which is why I’m focusing on the investment prospects of Just Eat PLC (LON:JE) (JE.L), Next plc (LON:NXT) (NXT.L), Tesco PLC (LON:TSCO) (TSCO.L) and Boohoo.Com PLC (LON:BOO) (BOO.L).
Just Eat’s share price has slumped by 10% in the last week after it released an investor update. The company outlined a £50 million investment plan which seems to have caused a sudden decline in investor sentiment.
In my view, Just Eat continues to have investment potential for the long run. The company has growth prospects from both organic sources and the potential for acquisitions. Therefore, it remains one of my top growth picks in the FTSE 100.
Tesco is a surprisingly strong growth option in my view. The company is expected to post a rise in earnings in the double digits over the next couple of years. This has the potential to boost investor sentiment and push its share price higher.
With Tesco now more efficient and offering higher margins than a few years ago, I believe it is in a strong position to compete with rivals within the increasingly concentrated supermarket sector.
Next may face an uncertain future if consumer confidence remains weak. However, with the company having what I consider to be an experienced management team, it could offer surprisingly strong performance in the long run.
With the company having performed better than many of its peers in the financial crisis and its aftermath, Next could deliver share price growth. With a PE of around 11, I’m upbeat about its capacity to deliver high total returns on a relative basis.
Boohoo.Com remains an expensive stock in the eyes of many investors. However, I wouldn’t be surprised if its valuation remained at the current level over the medium term. The company offers relatively high sales and EPS growth which could help to justify its heightened PE ratio.
With Boohoo having a clear growth strategy and a focus on customer loyalty, I believe the company could become a bigger and more profitable business in the long run. This could be the catalyst for future share price growth.