Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

We feel more comfortable about consumers' ability to sustain economic growth based on an upward revision to the personal savings rate. Every year, the Bureau of Economic Analysis (BEA) updates recent years' data with more-complete and more-detailed information from sources such as the Statistics of Income data from the Internal Revenue Service. Last month's revisions to the National Economic Accounts go back to 2019. We had been concerned that consumers were stretching budgets and might be running out of steam. Indeed, many are strained based on what we are hearing from big retailers -- but in aggregate, the revised data show that consumers are in better shape than we expected. The chart below shows the monthly personal savings rate based on the previous data and on the new, revised data. For 2024 through July, the savings rate had averaged 3.4% under the old data and 5.2% under the new data. While the former numbers were of concern, the revised savings rate is close to the average of 5.7% since 2000. The median, or middle, value since 2002 is 5.4%. Which numbers were revised higher to lift the savings rate? Personal income was raised (primarily as a result of stronger interest and dividend income) as was business income. Personal saving is what is left over after households pay their taxes and bills. The savings rate represents savings as a percentage of disposable (after-tax) income. The policy implications of additional strength in the economy's engine room haven't gone unnoticed. "While the upside risks to inflation have diminished, they have not vanished. I continue to see a meaningful risk that inflation could get stuck above our 2% goal," said Dallas Fed President Lorie K. Logan at an October 9 conference in Houston. "The ongoing resilience in consumption and gross domestic product (GDP) hint at the potential for unexpectedly strong demand, as do recent upward revisions to data on gross domestic income and the savings rate."

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Applied Materials Inc. (AMAT); TJX Companies, Inc. (TJX); GE HealthCare Technologies Inc (GEHC); Campbell Soup Co. (CPB) and the Focus List deletions are Dominos Pizza Inc (DPZ); Labcorp Holdings Inc. (LH); Mondelez International Inc. (MDLZ); Oracle Corp. (ORCL).

The back-to-school shopping season has just ended. In a blink, we'll be shopping for the holidays. That's should add up to a lot of shopping - but we'll see how secure consumers are feeling about their finances. Shopping patterns offer great insight into the state of consumers, who are the backbone of the U.S. economy (accounting for two-thirds of GDP). It's still a little early for some of the bigger industry groups to put out their holiday estimates, but we do have some data points to consider. Overall, the National Retail Federation expects retail sales to increase 2.5%-3.5% for the entire year. Stastista expects a 4% increase in holiday sales for 2024 compared to 2023. eMarketer forecasts a healthy 4.8% rise in holiday sales compared to last year. Salesforce predicts a 2% increase in 2024 holiday sales, which is still growing but at a slower pace than the 3% logged last year. In sum, consumer spending growth could be between 2%-5% this holiday period. Meanwhile, Forbes notes the following particulars about this upcoming holiday season: 1) it is shortened, with only 27 days between Thanksgiving and Christmas; 2) past presidential election years have shown a dip in spending leading up to and following the election; and 3) Walmart and Amazon account for roughly 38% of total retail growth, presenting a challenge for other retailers. The following is a list of BUY-rated stocks in Argus' Universe of Coverage. These represent companies that are leaders in the retail industry. Some of these stocks are also in various Argus portfolios.