What Are You Wishing for Christmas This Year?
Zacks Investment Research | Dec 21, 2020 01:30AM ET
It has been a horrible year. There was so much to lose with the virus traveling all over the world and literally sending people scurrying home, forcing them to give up their habits of many years just so they’d be in a safe place.
But we are finally able to say that the worst may be over. Not only is a vaccine already available, but we also have a whole range of therapeutics that are taking care of those people that have already been infected.
Companies are operating with safety measures in place, production continues to accelerate as supply chain issues are cleared up, demand including pent-up demand is going through the roof. We have every reason to believe that 2021 is going to be a boom year.
So what about personal finances? Those aren’t in good shape only if you belong to really small scale operations like the restaurant around the corner or maybe an Uber (NYSE:UBER) driver. Because then you’d be seeing either a job loss or a reduction in pay.
But for everyone else, we can thank the government for the timely stimulus and hope that the next installment isn’t too far off. When it comes, there’ll be new life in the smaller caps and affected individuals can also breathe easy. Plus the Fed’s decision to keep interest rates at 0 has pushed money into the markets, which has made money for many. So people have money to spend now.
And this is the spending season after all. So it seems very likely that you’ll splurge on the things you’ve been longing for, reward your kids for helping you through the tough year and in general, celebrate the joy of being alive and well!
In this kind of an environment, it seems obvious that some industries will do particularly well. So here, I’m picking three, and mentioning a few stocks that can make you money while you’re busy spending-
The one that stands out on this theme is the Leisure & Recreation Products industry. It’s in the top 9% of Zacks ranked industries. There are so many stocks you could buy here right now that you feel quite spoilt for choice.
My first choice is Acushnet Holdings (NYSE:GOLF) Corp. GOLF , which makes golf balls, clubs, gear and apparel. The company has a Zacks Rank #1 (Strong Buy), a Growth score A and a VGM Score B. after topping September quarter estimates by 140%, the Zacks Consensus Estimate for the current year climbed 34 cents (43.6%). The shares are also trading close to their median value over the past year, so there seems to be significant scope for upside.
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Zacks #1 ranked Vista Outdoor (NYSE:VSTO) Inc. VSTO , is second on the list. It makes things like binoculars, laser rangefinders, riflescopes, trail cameras, archery accessories, blinds, decoys, game calls, gun care products, mounts, powder, reloading equipment, targets, target systems, safety and protective eyewear, fashion and sports eyewear that are used for hunting and other outdoor activities. Since we are in the middle of the hunting season in most places, it’s obvious that the company will see an uptick in demand.
With Value, Growth and VGM Scores of A, it isn’t surprising that the company posted a 71.9% EPS surprise in the last quarter. The Zacks Consensus Estimate for fiscal 2021 (ending March) also moved up 73 cents (37.1%).
The shares are surprisingly cheap, being well below their median value over the past year as the company is likely to see tough comps the following year. Investors should bear in mind that the EPS estimate for next year is currently $2.36 compared to just 24 cents last year. So the shares are a steal. And this is the perfect time to jump in.
I also like #2 (Buy) ranked Brunswick (NYSE:BC) Corp. BC , which is known for its many leading brands such as the Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and inboard engines; MotorGuide trolling motors; Attwood and Whale marine parts and accessories; Land 'N' Sea, Kellogg (NYSE:K) Marine, Diversified Marine, BLA and Bell RPG parts and accessories; Bayliner, Boston Whaler, Brunswick Commercial, Crestliner, Cypress Cay, Harris, Lowe, Lund, Meridian, Princecraft, Quicksilver, Rayglass, Sea Ray and Uttern boats; Life Fitness, Hammer Strength and SCIFIT fitness equipment; Brunswick billiards tables, accessories and game room furniture; and InMovement products and services for productive well-being.
The shares carry a Value Score B, Growth Score A and VGM Score A. Since the 32.4% earnings surprise in the last quarter, the Zacks Consensus Estimate for 2020 has jumped 62 cents (15.0%). The share trading relatively close to their median value over the past year, so there’s much room for upside.
Another gainer from the holiday season is the Household Appliances industry, in the top 7% of Zacks ranked industries. That we would be out there making the most of the many deals available when we need to replace something in the house and have the money to do it, seems a no-brainer.
Electrolux AB ELUXY is an attractive pick here. This maker of household and commercial appliances, vacuum cleaners and other floor care machines, sewing machines, chain saws, lawn mowers and weed eaters among other things has a Zacks Rank #1 and Value, Growth and VGM Scores at A. It topped the Zacks Consensus Estimate by 260.1%, after which the lone analyst covering the stock took his 2020 estimate up $1.05 (62.1%). The shares are trading below their median value over the past year. So now’s the time to buy.
One of the largest manufacturers of home appliances in the world, Whirlpool Corp. WHR needs no introduction. This Zacks Rank #1 company has Value, Growth and VGM Scores of A. it reported an EPS surprise of 68.5% in the last quarter, after which analysts took their 2020 estimates up $4.18 (30.6%). As a result, WHR is now expected to grow earnings both this year and the next. The surprising thing is that despite this, the shares continue to trade below their median valuation over the past year. So they are a great buy.
That brings me to industry number three, which is Retail-Jewelry, which is in the top 34% of Zacks ranked industries. Some people are just not into the outdoor stuff. And they don’t have any new gadget they need to buy. Or maybe they do, but they also want to buy jewelry for themselves, or a loved one. It’s Christmas after all.
So Tiffany & Co. TIF , with its Zacks Rank #2, Growth Score B and VGM Score B looks good here. The company posted a 48.0% EPS surprise in the last quarter, after which the Zacks Consensus Estimate for 2020 went up 27 cents (10.5%). What’s more, the shares are trading at around their median value for the year, indicating upside potential.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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