Every investment sector has its subgroup. The retail sector comprises a number of companies, from high-end shops to big-box stores. Depending on the economic cycle and valuation, some of those niche areas will perform better than others.
With the economy cooling off, consumers are likely to look for lower-cost shopping experiences. And it could mean a rise in spending on little luxuries, rather than large ones.
That bodes well for convenience store chains. These stores have seen high growth, and cater across the economic spectrum.
In the convenience store chain segment, Casey’s General Stores (CASY) continues to post strong growth. The Iowa-based chain is up 57% over the past year, more than doubling the return of the stock market.
While the retail space has tight margins, Casey’s growth indicates a chain on the rise, which can lead to big returns for shareholders with the patience to see an expansion pay off.
Action to take: Investors looking for a momentum play in retail may have a winner with shares here, especially for those patient enough to invest for a few years. Casey’s also pays a 0.5% dividend.
For traders, the February 2025 $400 calls, last trading for about $19.00, could see mid-double-digit returns on a further trend higher into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.