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Quarter-End Insights

Consumer Cyclical: Still Opportunity in a High-Confidence Environment

Many discretionary companies have benefited from positive sentiment following the U.S. presidential election, and some still have attractive margins of safety.

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  • On a valuation basis, the consumer cyclical sector is fairly valued, trading at a median price/fair value of 1.00 as of Feb. 1, 2017.
  • Bolstered by an improving job market and demographics, the travel industry remains one of the most resilient consumer cyclical categories, despite uncertainty surrounding President Trump's proposed travel ban and its impact on the economy.
  • Brick-and-mortar apparel continues to face headwinds from the shifts to e-commerce and lack of enticing new fashion.
  • The continued global shift to online purchases continues to aid players with leading networks.

 

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Dan Wasiolek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.