Leisure Stocks To Flourish In December: 5 Top Picks

In the last month of the year, providers of leisure products and services are set for gains. The space includes providers of golf service, boats, outdoor spaces, cruises, travel and hotels. A low unemployment rate and steady rise in wages have increased household spending across the United States, boding well for the leisure space.

Spending Spree Drives Economy

U.S. consumers have been driving the economy lately, per the Commerce Department’s report released on Nov 27. Notably, GDP increased at a 2.1% annualized rate in its second estimate of the third quarter. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 2.9% rate in the third quarter.

In fact, spending increased at a seasonally adjusted rate of 0.3% in October — the fastest in three months and the best since July’s 0.5% rise.

Further, reports from Adobe (NASDAQ:ADBE) Analytics show that Black Friday online sales in the United States totaled $7.5 billion, up 20.5% year over year. Black Friday sales are a preview to customer spending trends for the near term.

At the same time, consumer confidence levels remain high, thanks to almost a 50-year low unemployment level, scarce layoffs and steady rise in wages. All these will certainly improve consumer outlays as well.

In fact, in a survey conducted by the University of Michigan, consumer sentiment index rose to 96.8 in November, marking its third monthly gain. This index shows that consumers anticipate inflation, unemployment and interest rates to remain favorable in the near term.

Such healthy consumer spending will certainly offset the hurdles the leisure industry has been facing this year. The leisure industry saw a drop in corporate activities due to trade uncertainties and Trump’s visa restrictions that made traveling to America difficult.

5 Top Picks

The leisure industry, which falls under the Zacks Consumer Discretionary sector, is likely to gain from higher consumer spending owing to a drop in unemployment rate. Therefore, it is wise to say that the space will perform well in December as Americans gear up for the holiday season. Here, we have picked stocks from the space which flaunt a Zacks Rank #1(Strong Buy) or 2 (Buy) and have seen growth on a year-to-date basis.

YETI Holdings, Inc. (NYSE:YETI) designs, markets, retails, and distributes products for the outdoor and recreation market. The company’s expected earnings growth rate for the current year is 25.3% compared with the Original post

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Written By: Zacks Investment Research