Editor's note: Prices are soaring throughout the economy. We still have opportunities to profit as investors, though... especially with the right indicators to guide us. Today, Mike Burnick – senior analyst at our corporate affiliate TradeSmith – says a few key signals are highlighting an overlooked stock that's handily beating its peers...
The American people aren't taking a "wait and see" approach to find out if the Federal Reserve can get inflation under control...
They can't afford to wait.
In August, grocery prices rose at their fastest pace since 1979. Household-furnishing prices climbed. And even though we saw slight relief from inflated prices at the pumps, we're still just one major issue away from prices skyrocketing again.
Folks are taking matters into their own hands. Specifically, they're turning to membership-only warehouse clubs to make their hard-earned dollars stretch further.
A survey by Consumers' Checkbook previously found that a family spending $150 a week at a conventional supermarket could save up to $2,000 a year by shopping at a membership-only warehouse club.
These clubs sell home goods, electronics, and much more at steep discounts. Many also offer gas perks. It's almost a no-brainer to become a member.
Today, I'm going to share a potential investment that's cashing in on the membership-only warehouse-club model. And it's not the company you might expect...
When talking about membership-only warehouse clubs, three brands normally come to mind...
- BJ's Wholesale Club (BJ)
- Costco Wholesale (COST)
- Sam's Club (owned by Walmart (WMT))
But of these "big three" discounters, one has performed much better overall.
The chart below reveals how BJ's dominated its two chief rivals after all three experienced a pullback through April and May. Take a look...
BJ's operates more than 230 retail "wholesale clubs" and 160 branded gas stations.
In addition to everything you need to make a home-cooked meal, you can also find baby formula, patio furniture, TVs, seasonal decorations, and pretty much anything else you can think of at BJ's – all in one shopping trip.
The company has service departments that include:
- BJ's Tire Center for members-only deals on tires.
- BJ's Optical Center for eye exams.
- BJ's Travel for members-only discounts on vacation packages, hotels, and rental cars.
Club members also benefit from discounted items through several other companies that BJ's has partnered with.
You can also buy from BJ's online and pick up your order in store, thanks to a program it rolled out in 2018. This makes shopping even more convenient for its members... And it helped fuel a 47% year-over-year increase in digital sales in the second quarter this year.
BJ's gas stations are thriving, too, selling 18% more gallons of gas in the second quarter than in the same period a year ago...
And the company plans to eventually sell gas at 75% of its locations.
Today, people are scrutinizing what memberships they are paying for – like music- and video-streaming services. But it's clear that most folks consider their BJ's Wholesale Club memberships too important to cut.
Take a look at these highlights from the company's latest earnings report. It's further proof that business is booming...
- Total comparable club sales increased 19.8% year over year.
- Free cash flow reached $300.4 million.
- Income from membership fees came in at $98.8 million for an 11.3% year-over-year increase.
- And gross profit increased from $763.5 million the previous year to $860 million.
Finally, to round it all out, our TradeSmith tools confirm the company is firing on all cylinders...
We use several indicators and proprietary algorithms at TradeSmith. They can let us know if a stock is in "buy mode" or "sell mode"... how big a position to take... when to get back into a position you've sold... and a lot more.
Right now, BJ is in our "green zone" at TradeSmith. That's our "buy mode" indicator – it means you can consider buying the stock because it's trading within its normal volatility range.
The stock is also in an uptrend, according to our proprietary Smart Moving Average. That's a sign from our algorithms that momentum is on our side and the stock is on track to make a sustainable move higher.
Take a look...
During a time of sky-high inflation, interest-rate hikes, and looming fears of a recession, this industry is thriving...
BJ's is the best contender. That makes this a stock you should consider today.
Editor's note: One expert says the TradeSmith system is sending out a flood of new alerts. And it's so important, he's pulling back the curtain to share what they're showing today...
These alerts warned him about the COVID-19 crash before stocks entered the fastest bear market in history. They even flashed a bearish signal at the beginning of 2022, weeks before stocks fell more than 20%. So you don't want to miss this.
Learn what's coming... what steps you should take to protect your money... and which sectors this proprietary system is actually bullish on today. View this expert's message right here.
Inflation is stubbornly high. The Federal Reserve is hiking rates to try to control it... slamming the stock market in the process. How long can this go on? Our analysts at Stansberry NewsWire dug into the numbers to find out... Read more in our Weekend Edition here.
"Last year, the supply-chain crisis almost canceled Christmas," Sean Michael Cummings writes. This year, though, retailers aren't crunched for supplies. And it might mean good news for last-minute bargain hunters as the holidays approach... Learn more here.