Consumer cyclical stocks have been on investors’ radars this week. Yes, they crashed harder than most parts of the stock market did back in March. Logically, you’d think that these companies would continue to suffer as long as the pandemic is around right? Well, the top consumer cyclical stocks now have proven that there are those in the sector with resilience, nonetheless. For example, take a look at Nike’s (NYSE: NKE) share prices. NKE stock is currently looking at gains of over 130% since the stock market crashed last March. In fact, it hit a new all-time high during yesterday’s trading session. Another example of this would be the e-commerce apparel website Etsy (NASDAQ: ETSY). Its shares surged by over 270% in the past year. With investors chasing these stocks, could it be wise to follow suit?
Before we consider that, it is important to first know that cyclical stocks often move in tandem with the economy. Consumer cyclical stocks rely heavily on consumers’ spending on their wants. We can see this shift in consumer spending habits now as they have mostly adjusted to pandemic living. People often save for vacations, but we all know that is not happening soon. What’s left for consumers to spend their hard-earned cash then? Well, that’s where the top consumer cyclical stocks come in. Investors appear to be aware of this, hence explaining all the attention on the sector now.
So, should you invest in consumer cyclical stocks now? Well, with the upcoming U.S. stimulus package, the industry could see new tailwinds. If you are leaning towards investing, here is a list of top consumer cyclical stocks to watch this week.
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First up, we will be looking at video game retailer GameStop. Understandably, the company’s business has boomed throughout the pandemic. Being a source of entertainment for those stuck at home does have its merits. Notably, GME stock jumped by over 12% during yesterday’s trading session. This happened as the company announced its recent holiday sales results on the same day.
Safe to say, the company had a busy holiday season. GameStop reported its worldwide sales results for the nine-week holiday period ended January 2, 2021. In the report, it saw a 309% increase in e-commerce sales. CEO George Sherman explained, “Overall, we remain confident in both the positive growth aspects for 2021 driven by our strategy to add new and exciting product revenue streams across all things games and entertainment and the strong demand for the new generation for console-based video game products.” No doubt, the release of Sony’s (NYSE: SNE) and Microsoft’s (NASDAQ: MSFT) consoles brought many returns for GameStop. With supplies running dry as soon as they hit shelves, investors could be watching GME stock closely.
Adding to that, the company also brought on three new directors to ‘refresh’ its current board. They are Alan Attal, Ryan Cohen, and Jim Grube from RC Ventures. The company said in a statement, “The three new directors collectively bring deep expertise in e-commerce, online marketing, finance, and strategic planning to GameStop. These skillsets will support the Company’s continued focus on optimizing core operations and creating a powerful and exciting ecosystem for games and entertainment.” Admittedly, GameStop seems to be firing on all cylinders. However, time will tell if the trio can deliver on their supposed value. Given all of this, do you think GME stock has more room to grow this year?Crocs Inc.
Another top consumer cyclical stock to watch would be Crocs. The Colorado-based company is the sole manufacturer of the Crocs brand foam clogs. This leader in innovative casual footwear has been on a tear ever since the pandemic hit in March. To point out, CROX stock is looking at gains of over 580% since. Just yesterday, it surged by over 12% and hit a new all-time high during intraday trading. You might be thinking, they’re just shoes, right? Well, Croc gave investors some delightful news in the form of a guidance update yesterday.
In it, the company raised its 2020 revenue guidance and expects accelerated the full year 2021 revenue growth within the range of 20% to 25%. CEO Andrew Rees said, “Amidst a global pandemic in 2020, we will deliver the strongest revenue in Crocs’ history.” If this is the case, it would mark a towering achievement for the company across its 18-year history. Naturally, investors would be more than eager to jump on to a company that seems to be on the uptrend. Given its impressive trajectory estimates, could it be a good time to invest in CROX stock? Your guess is as good as mine.
As expected, the company saw green across the board in its recent quarter fiscal. It reported $361.74 million in total revenue for the quarter which marked a sizable 15% year-over-year increase. To investors’ delight, Crocs also saw its earnings per share skyrocket by over 78% in the same period. Rees explained, “We achieved record third-quarter revenue and EPS despite the challenges presented by the global COVID-19 pandemic. Our extraordinary performance and strong cash flow generation demonstrate the strength of the Crocs brand and product offering globally.” With all this in mind, will you be adding CROX stock to your watchlist?Barnes & Noble Education
Barnes & Noble Education, or BNED, is a leading provider of solutions for the education industry. Its offerings cater to hundreds of academic institutions nationwide. This, in turn, equips millions of students for learning in the modern age. This is important because of how education has changed in these times. Consumers would turn to BNED should they require additional academic support at home. Seeing as BNED stock has soared by over 370% since the March lows, I say we take a closer look at the company.
In its second-quarter fiscal reported last month, the company reported total revenue of $595 million for the quarter. CEO Michael Huseby said, “Our teams continued to make tremendous progress in growing and enhancing our offerings and services this quarter, despite the many challenges presented by the ongoing COVID-19 pandemic. As students adjusted to a blended learning environment on campuses nationwide this fall, our flexible offerings ensured that students were equipped with their course materials regardless of whether their schools resumed classes on campus, remotely or adopted a hybrid learning model.” In theory, as the pandemic persists for the foreseeable future, BNED could see steady demand for its offerings. Therefore, investors could be betting on the ever-present need for more efficient and quality education.
Regardless, the company appears to be pushing forward even as it faces pandemic related impacts to its business. Last week, BNED announced the addition of a math solver feature in its homework help and learning solutions product, Bartleby. The new feature is powered by Wolfram|Alpha’s best-in-class computation engine. It will serve to help students via an interactive digital calculator that provides step-by-step explanations for mathematical problems. For one thing, BNED looks to be bolstering its core business. Could this mean more gains for BNED stock in the long run? You be the judge.