JB Hi-Fi has set a blistering pace over the past year. Shares in the electronics retailer closed at $115 on Monday, up 25 per cent year to date and 43 per cent over the past 12 months. Those gains have investors asking the obvious question: what’s the next big retail stock to run?

Professional stockpicker Jun Bei Liu from TenCap joined Switzer Investing TV with her take.

She said the search for the next market darling starts with following the money, and right now that means consumer discretionary spending. Recent Reserve Bank rate cuts have given households more breathing room, and retailers tied to housing and lifestyle are set to benefit.

Harvey Norman

Harvey Norman’s latest result reassured investors that its earnings momentum is intact. The retailer reported strong like-for-like sales growth, keeping pace with JB Hi-Fi’s performance but trading at a much cheaper valuation.

Jun Bei Liu said the company still looks undervalued despite its strong run. “After the result we continued to add to Harvey Norman because it is still too cheap. Earnings momentum is very strong. Like-for-like sales are almost as good as JB Hi-Fi, but Harvey Norman trades on half the multiple. It looks really attractive.”

The market appears to agree. Harvey Norman shares are trading at $7.36, up almost 60 per cent this year and over the past 12 months.

Adairs

Smaller homewares chain Adairs has also caught Jun Bei Liu’s attention. The company was hit by downgrades in May and June, but Liu saw that as an opportunity to buy.

“We actually bought more Adairs when it had the downgrade in May and June. The whole housing market has turned the corner, so housing-related retailers are looking really interesting. Over the next one to two years these companies will stay in an upgrade cycle,” she said.

Adairs shares have been more volatile than Harvey Norman or JB Hi-Fi, but Liu argues that improving housing turnover should support sales growth and margins.

Bonus pick: REA Group

Away from pure retail, Liu also flagged REA Group as a standout. The realestate.com.au owner reported what she called an “incredible” result, even though the share price has lagged.

“Realestate.com hasn’t performed much, but the result was incredible. Housing turnover is picking up and listings will be very strong as we head into spring,” she said.

She added that recent RBA rate cuts should boost activity further, while the rise of AI could be another tailwind. “REA has the data, the relationships and the reach. AI will help them explore new ways to unlock that value,” she said.