Credit Suisse's Top 10 Consumer Discretionary Stocks: J M Smucker In, Mondelez Out

The Consumer Discretionary sector has been one of the market’s brightest sectors in 2015, and the Consumer Discretionary Select Sector SPDR ETF (NYSE: XLY) has gained 5.7 percent versus the S&P 500’s 3.8 percent decline year-to-date. For the first time in two months, Credit Suisse analysts have updated their top Consumer Discretionary stock picks in 10 different subsectors.

Here’s a full list of the names they chose.

1. Apparel & Footwear: Hanesbrands Inc. (NYSE: HBI)

Analyst Christian Buss sees the company as a “strong and steady cash flow generator” with the opportunity to grow earnings via acquisitions and a mix shift toward premium products.

2. Autos & Auto Parts: Magna International Inc (NYSE: MGA)

Analyst Dan Galves believes the company will be “a key beneficiary of increasing vehicle globalization” and is confident that it can meet its 2017 revenue and margin targets.

3. Gaming & Lodging: Six Flags Entertainment Corp (NYSE: SIX)

Analyst Joel Simkins predicts that the company will be able to capitalize on its pricing power in coming years, and he also likes the robust 4.5 percent dividend.

4. Homebuilding & Building Products: Mohawk Industries (NYSE: MHK)

Analyst Mike Dahl sees continuing improvements to operating margins due to pricing power, cost controls and tailwinds from low oil prices.

5. Media, Cable & Satellite: Time Warner Inc (NYSE: TWX)

Analyst Omar Sheikh explains that “if we were to strip out HBO at valuations of $30bn-$35bn, the rest of Time Warner is currently trading at 14x-16x 2016 PE, a material discount to Disney and Fox at ~18-19x.”

6. Packaged Food: J M Smucker Co (NYSE: SJM)

Analyst Rob Moskow thinks that if management handles overhead expenses, the company can boost EPS to $7.61 and share price to $152 by 2018. Smucker replaces Mondelez International Inc (NYSE: MDLZ) as the only new Consumer Discretionary stock on Credit Suisse’s list.

7. Retail, Broadlines & Department Stores: Costco Wholesale Corporation (NYSE: COST)

Analyst Michael Extein calls the company “one of the few conventional retailers that continues to deliver positive traffic, market share gains, and a validated model for international expansion.”

8. Retail, Food & Drug: Dollar General Corporation (NYSE: DG)

Analyst Ed Kelly likes the company’s strong comparable store sales growth, accelerating square footage growth, improving margin outlook and aggressive share repurchase strategy.

9. Retail, Hardlines: Home Depot Inc (NYSE: HD)

Analyst Seth Sigman views the company as “a best-in-class retailer with a strong management team that participates in one of the strongest segments of retail.”

10. Restaurants: Dunkin Brands Group Inc (NYSE: DNKN)

Analyst Jason West sees strong demand for westward expansion, which he believes is "the key to the DNKN story."

Disclosure: the author holds no position in the stocks mentioned.