While the majority of investors remain focused on big tech plays and new markets like e-commerce and the cloud, in which Amazon.com Inc. (AMZN) and other well-known stocks come to mind, bargain hunters may want to consider big-box retailer At Home Group Inc. (HOME), dubbed the Anti-Amazon pick in a recent Barron's report

'Treasure Hunt' Feel Hard to Replicate Online

While shares of Seattle-based e-retail behemoth Amazon are up nearly 35% YTD despite big tech's massive sell-off and weaker than expected earnings posted last week, Plano, Texas-based At Home Group stock has underperformed the market in 2018, down 13% versus the S&P 500's roughly flat run through Monday afternoon. 

At Home executes a 100% brick-and-mortar strategy, with its no-frills stores sized at an average of 110,00 square feet. The retailer has gained on a rise in fast fashion for home decor, carrying indoor and outdoor decor products like rugs and furniture, bedding, and kitchen and garden products. By working closely with suppliers, the company seeks to bring the newest trends and items into stores. About 40% of products sold by At Home have been available on the market for less than a year, according to CEO and Chair Lee Bird, as cited by Barron's. 

Analysts at Jefferies are bullish on shares of the traditional retailer, writing that At Home's "treasure hunt" feel is hard to replicate online. Analyst Jonathan Matuszewski says the concept is particularly attractive to Millennials, which comprise roughly 30% of At Home's customers and who have the highest income growth in the U.S. as they settle down, buy homes and seek out the latest styles. 

The Jefferies analyst views At Home as a significant competitive threat against home improvement stores, discounters and other home-decor specialists. 

Meanwhile, the market at large is expected to grow steadily over the next few years. Wells Fargo senior analyst Zachary Fadam expects the home-decor market, estimated at $200 billion in 2017, to grow 2% annually over the next several years. 

Big Box Retailer to Withstand Tariffs, Home Building Headwinds

Moving forward, while $1.7 billion At Home still represents a small percentage of the market, with $1.1 billion in sales over four quarters and little brand recognition, its opportunities for growth are significant. Bird says the retailer could eventually have over 600 stores in the U.S., up from its 170 current locations. As At Home hikes its marketing spend, targeted at 3% of sales in 2019, it should grow its brand recognition from 11% currently, to catch up to Target Corp. (TGT) at 41% and TJX's (TJX) Home Goods at 32%, noted Jefferies. 

Bulls are also upbeat on At Home's Insider Perks loyalty program. The company's answer to Amazon Prime raked in 2.7 million members in its inaugural year. 

At Home has posted 17 consecutive quarters of top-line growth of at least 20%. The Street is targeting for 23% sales growth this year, including new store openings, and a 22% rate in 2019. 

While bears continue to cite tariffs and a down cycle in the homebuilding space, Bird says duties won't have a material impact on earnings in the current or next fiscal year. Jefferies, which sees shares gaining nearly 78% to reach $47 within 12 months, says suppliers will be willing to cut prices and "swallow a chunk of the tariffs," given At Home is "one of their fastest-growing accounts." 

Value focus and low prices should hedge against an economic downturn, noted Bird. Wells Fargo bulls agree, citing At Home's price to forward earnings multiple of 18 times, over 50% lower than other high-growth retailers including Ollie's Bargain Outlet Holdings (OLLI), Five Below (FIVE) and National Vision Holdings (EYE). 

Craig Hodges, portfolio manager at Hodges Small Cap fund, views HOME's recent weakness as "a complete overreaction," writing that, "as an investment manager, these are the kind of things you want...to get a second chance at these high-growth companies."