We recently published a list of 10 Best Retail Stocks To Invest In. In this article, we are going to take a look at where TJX Companies, Inc. (NYSE:TJX) stands against the other best retail stocks to invest in.
What Does the Holiday Shopping Season Look Like?
On December 2, Lindsey Bell, Chief Strategist at 248 Ventures, appeared on CNBC to discuss the consumer and economy in the holiday shopping season and the impact of proposed tariffs and the strong dollar on earnings. She said that the economy will see a resilient consumer, economy, and marketplace this week and at the end of the year. Bell expressed optimism going into the end of the year and was of the view that there is opportunity in retail at the present after staying in the shadows as a forgotten area.
As consumers have shifted in how they spend money and what they spend it on over the last several years, the retail sector is starting to see a comeback to discretionary items. Although an opportunity exists, retailers can only avail of it if they have the right merchandise at the right price or offer the right experience for the consumer. This is because the consumer is still value-oriented and price-sensitive simultaneously.
Tariff Threats: Are They Real for Investors and Consumers?
Concerns are circulating in the retail industry about the potential effects of “tariff threats” on the economy. Bell was of the view that it is undoubtedly necessary to stay on top of the potential threats that the president-elect’s proposed tariffs might cause to the markets.
However, she took us back to Trump’s first term as a president and the tariff increases he made, that Joe Biden continued in his term, highlighting that there wasn’t a significant lasting inflationary impact to them. She explained how tariffs work, saying that they go up when put on and have an impact in the near term, but eventually subside over time. The markets saw that in 2018 and 2019, while real inflation came in 2021 and 2022 with the pandemic. She reiterated that although the tariffs are something we need to keep an eye on, the scenario is not something we need to worry about from a consumer perspective this holiday shopping season.
Although the tariffs may not pose threats to consumers, what do they mean for investors? With the dollar up by half a percent at the time of the interview, concerns are rising about the dollar’s possible strength going into the next earnings season and the possible impact on rates that these “tariff threats” might bring about.
Bell agreed that the dollar’s strength impacts the earnings season, as about 50% of the S&P 500 gets its revenues from overseas multinational companies. She said that the dollar’s strength can continue into the year ahead, but this is a relative game. It is important to consider the currency and the strength of the economy around the world, as a strong dollar does depict a strong economy here in the US.
A busy retail store floor with customers trying on apparel and browsing the products.
Our Methodology
For this article, we used the Finviz stock screener to identify around 40 retail stocks and narrowed our list to 10 stocks with the highest number of hedge fund holders, as of fiscal Q3 2024. We sourced the hedge fund data from Insider Monkey’s database. The stocks are arranged in ascending order of the number of hedge funds that have stakes in them.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 63
TJX Companies, Inc. (NYSE:TJX) is an off-price apparel and home fashion retailer in the United States and worldwide. The company’s fiscal Q4 2025 is off to a solid start, with goods available across a wide range of brands. It is flowing fresh assortments to its store and online for the holiday shopping season and beyond.
The company’s consolidated comparable sales grew at the high end of its plans in fiscal Q3 2025, driven entirely by customer transactions. Its apparel and home categories also saw comparable sales increases in fiscal Q3 2025. The TJX Companies, Inc. (NYSE:TJX) has a meaningful advantage as consumers can shop its value-added items every day without having to wait for promotional days or sales. Despite that, it is well-positioned as a one-stop shop destination for holiday gifts, with its assortment appealing to a broad range of income demographics.
After the holiday season, the company plans to continue its focus on being a year-round gifting destination. It plans to offer fresh merchandise online and in its stores multiple times a week. The company has more than 5,000 stores as of fiscal Q3 2025, and continues to see the potential to open 1,200+ stores with its current retail banners in its current countries. The TJX Companies, Inc. (NYSE:TJX) has announced plans to expand its T.K. Maxx banner in Spain, with the first stores expected to open in early 2026 and long term. The company sees the potential to open more than 100 stores in Spain.
Madison Investors Fund stated the following regarding The TJX Companies, Inc. (NYSE:TJX) in its Q2 2024 investor letter:
“The TJX Companies, Inc. (NYSE:TJX), an off-price retailer, continues to do well. Its value-based retail stores are resonating with consumers given the backdrop of higher inflation, which led to strong revenue and profit growth in the most recent quarter.”
Overall, TJX ranks 3rd on our list of best retail stocks to invest in. While we acknowledge the potential of retail stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TJX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
