4 Top Consumer Discretionary Stocks To Watch In May 2021

Consumer discretionary stocks are gaining momentum in the stock market today. This would be the case seeing as the labor market shows signs of continued recovery. Namely, the U.S. Department of Labor released its weekly unemployment figures earlier today. In detail, there were 444,000 initial jobless claims last week, below the expected 450,000. This marks a new pandemic-era low, supporting economic recovery stocks as consumer spending remains on the uptrend. As such, consumer discretionary stocks which naturally benefit from consumers spending more would be on investors’ watchlists now.

For starters, travel and leisure stocks such as Disney (NYSE: DIS) would benefit from an eventual tourism boom. Whether it is pre-bookings or limited capacity events, the sector would be preparing eagerly for the post-pandemic market. Elsewhere, we could see continued support in retail names like Etsy (NASDAQ: ETSY) as well. Ideally, this could come from both existing users and global markets who are lagging in terms of dealing with the pandemic.

Overall, if investors continue to rotate out of 2020’s top growth stocks, the consumer discretionary industry could be in focus. Given the slew of consumer discretionary stocks that could ride the current reopening tailwinds, I can see why. With all that said, here are four to consider watching on the stock market now.

Top Consumer Stocks To Watch This Month

Virgin Galactic Holdings Inc.

First up, we have a unique play on the tourism industry, Virgin Galactic. Now, most would not often think of SPCE stock when discussing consumer discretionary stocks. However, the company’s leading position in the space tourism industry would be one to consider in the long run. In brief, the company is developing commercial spacecraft and ultimately plans to facilitate space tourists via suborbital space flights.

SPCE stock
Source: TD Ameritrade TOS

For investors looking to bet on this new frontier of the travel industry, SPCE stock would be a viable option now. The company’s shares are trading hot today with gains of over 15% as of 3:52 p.m. ET trading at $19.92. This could be investors reacting to its latest announcement.

Diving right into it, Virgin Galactic is looking to run its next spaceflight test this weekend. In an announcement earlier today, the company revealed that it had completed a maintenance review of its flagship carrier aircraft allowing for the test. According to CEO Michael Colglazier, the test flight will involve two pilots carrying “microgravity research payloads”. As it stands, Virgin Galactic is supposedly still aiming to begin its commercial services in 2022. Should this be the case, does SPCE stock seem like a buy to you now?

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Roblox Corporation

Roblox is a video game developer that is based in San Mateo, California. It is ranked as one of the top online entertainment platforms for audiences under the age of 18. The company has a co-experience platform that enables shared experiences among billions of users. Its platform is powered by user-generated content that draws inspiration from gaming, entertainment, social media, and even toys.

best consumer discretionary stocks (RBLX stock)
Source: TD Ameritrade TOS

Last week, the company released its first-quarter financials. Revenue for the quarter increased by 140% to $387 million. Its bookings also increased by 161% to a whopping $652.3 million. Roblox also reported that its average daily active users (DAU) were 42.1 million, an increase of 79% year-over-year. User engagement also increased to 9.7 billion hours, almost doubling year-over-year.

Seeing how the company is able to capitalize on human beings connecting with one another, it continues to invest in creating and sharing experiences for the Roblox community. With that in mind, will you consider RBLX stock as a top consumer discretionary stock to buy?

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Delta Air Lines Inc.

Delta is one of the major airlines in the U.S. and a legacy carrier. The company in its pre-pandemic days offered more than 5,000 daily departures and as many as 15,000 affiliated departures. It also serves nearly 200 million people every year, taking customers to over 300 destinations in over 50 countries. Given how the airline industry is gradually recovering as vaccination rollout takes place all over the world, DAL stock has doubled in the last year.

top consumer discretionary stocks (DAL stock)
Source: TD Ameritrade TOS

In April, the company reported its March quarter 2021 financials. The recent demand trends are encouraging as confidence in air travel continues to rise. With vaccination rates improving and travel restrictions being eased, domestic leisure bookings have recovered to 85% of 2019 levels.

In this quarter, the company’s cash burn averaged $11 million per day and had turned positive in the month of March with cash generation of $4 million per day. Could these be signs of better days ahead for the company? Given how we could be at the last leg of the pandemic, the company could weather through it rather well. With all that being said, is DAL stock worth adding to your portfolio right now?

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Chewy Inc.

Chewy is a consumer stock that focuses on online retailers of pet food and other pet-related products. In essence, the company offers a personalized service of a neighborhood pet store alongside the convenience and speed of e-commerce. It also boasts a wide selection of products with over 45,000 items to choose from. With competitive prices, fast shipping, and around-the-clock convenience, Chewy is no doubt a leader in the retail industry. CHWY stock is up by over 75% in the last year.

consumer discretionary stocks to buy (CHWY stock)
Source: TD Ameritrade TOS

In March, the company reported its fourth-quarter and full-year 2020 financials. Net sales for the quarter grew by 51% year-over-year at $2.04 billion. Chewy’s net income for the quarter was $21 million.

Sumit Singh, Chief Executive Officer of Chewy had this to say, “Years of preparation and focus have positioned us as the Internet’s preeminent neighborhood pet store and a leading pure-play e-commerce company in the pet space. We look forward to a future marked by ongoing innovation and to winning customers’ hearts and minds as we grow to become the most trusted and convenient online destination for pet parents (and partners) everywhere.” Given all of this, will you consider buying CHWY stock?

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