Are These The Best Consumer Discretionary Stocks To Buy Right Now?
Consumer discretionary stocks continue to make headlines as we start another week of trading. And it’s not just the biggest winners of 2020 that investors are focusing on. Rather, they seem to be watching the industry as a whole. This is because of several key happenings now.
Firstly, the top Reddit stocks appear to be getting a second wind as they mostly closed last week on a high. The main focus would be GameStop (NYSE: GME) which saw its shares double in value over the past five trading sessions. Second, Johnson & Johnson’s (NYSE: JNJ) single-dose vaccine was granted emergency use approval by the U.S. FDA over the weekend. As with most positive vaccine news, many would see it as another step towards ending the pandemic. Because of this, investors seem to be flocking towards tourism industry players like Carnival Corporation (NYSE: CCL). Third, Joe Biden’s $1.9 trillion stimulus package was passed by the House and is now headed towards the Senate. Ideally, this is a step towards providing consumers with additional discretionary dollars to be pumped into the industry.
With these three factors in play, I could understand if you are keen to invest in the sector yourself. Well if you are, here are four top consumer discretionary stocks making moves right now.
Top Consumer Discretionary Stocks To Watch
- Penn National Gaming Inc. (NASDAQ: PENN)
- Tripadvisor Inc. (NASDAQ: TRIP)
- Airbnb Inc. (NASDAQ: ABNB)
- Etsy Inc. (NASDAQ: ETSY)
Penn National Gaming Inc.
Starting us off is casino company Penn National Gaming (PNG). In brief, PNG is an operator of casinos and racetracks. It has 43 facilities across the U.S. and Canada, most of which operate under the Hollywood Casino brand. Through its interactive entertainment arm, Penn Interactive, the company provides retail sports betting services in Pennsylvania and Michigan. For one thing, PNG would stand to benefit from both the current online sports betting and post-pandemic tourism trends. As you’d expect, this has put PENN stock in the spotlight. It has more than quadrupled in value over the past year. Given its latest sports betting portfolio update, I could see this run continue.
In particular, PNG revealed last week that it had entered into a 20-year strategic partnership with Rivers Casino in New York. This marks a groundbreaking move by PNG because of New York’s potentially lucrative online betting market. Together with several other states, the Big Apple is looking towards this industry to boost state revenue.
In turn, with PNG being one of the few top players to operate in the region, it could be looking at substantial gains moving forward. If that wasn’t enough, Google (NASDAQ: GOOGL) will allow real-cash gambling apps and related ads to run on U.S. smartphones starting today. Given all of this, will you be watching PENN stock?
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Following that, we will be looking at the world’s largest travel guidance platform, Tripadvisor. For some context, the company helps travelers with all their necessary vacation arrangements. Before the pandemic, travelers used its services to research and learn about holiday locations around the world. In terms of scale, the company operates in 49 markets and 28 languages, making the travel planning experience as easy as possible. Accordingly, investors would be looking towards TRIP stock as Tripadvisor will likely see major tailwinds in a post-pandemic market. Given the pent-up travel demand, TRIP stock is already looking at gains of over 70% year-to-date.
As it stands, Tripadvisor appears to be banking on improving travel trends later this year. Last week, the company launched a new live sentiment dashboard to support the recovery of global tourism. The live data dashboard is now available to destination marketing organizations (DMOs). In detail, this serves as an expansion of Tripadvisor’s collection of data intelligence services for DMOs, known as the Tripadvisor Insights Platform.
Simply put, Tripadvisor is providing its travel partners with the necessary tools to optimize operations once the pandemic is over. Given its current valuation, will you be adding TRIP stock to your watchlist?
Another consumer discretionary company in focus now would be Airbnb. The vacation rental company, dubbed one of the hottest IPOs of 2020, continues to catch investors’ attention. Similar to our previous entry, most see Airbnb benefiting from improving travel conditions. Essentially, this is because the company facilitates home rental and travel experiences on its digital marketplace. The likes of which provide hosts with additional income and travelers with affordable vacation experiences. Now, ABNB stock is looking at gains of over 40% year-to-date. Having released its fourth-quarter fiscal last Friday, could its shares continue to rise?
At the moment, it could go either way. Yes, the company posted year-over-year losses. However, its fourth-quarter revenue was only down by 22% compared to the same quarter last year. Given that Airbnb’s core businesses were significantly impacted by the pandemic, this shows the company’s resilience. Looking beyond the current figures, CEO Brian Chesky provided more details in an interview over the weekend.
To summarize, he mentioned that the average Airbnb host makes about $10,000 a year. This would incentivize more people to sign up for its host program, adding more variety to its current vacation rental offerings. Similarly, Chesky said that Airbnb will continue investing in pricing and advanced calendar tools to allow hosts to make the most of its platform. All in all, would you consider ABNB stock a top consumer discretionary stock now?
Growing e-commerce presence Etsy is next on our list. Through its website, the company offers a wide array of handmade or vintage items and craft supplies. From fashion accessories to home décor and crafting tools, consumers have plenty of variety to choose from. Especially with most stuck at home throughout the pandemic, it would not be surprising to see Etsy’s e-commerce business booming. Likewise, ETSY stock is up by over 550% since the March 2020 lows. Given the figures from its latest fiscal quarter, I could see investors flocking to ETSY stock.
Diving right into it, the company raked in $617.4 million in total revenue for its fourth quarter. This marks a remarkable 128.7% year-over-year leap in revenue. Etsy cites strong growth across its marketplace and services revenue as key drivers of its performance. In terms of net income, the company saw a massive 374% year-over-year increase as well.
Moving forward, CEO Josh Silverman said, “We are just getting started executing on our long-term growth strategy, focused on highly differentiated and defensible competitive advantages within a $1.7 trillion market opportunity.” Time will tell if Etsy can keep up its current momentum in a post-pandemic world. In the meantime, would you say ETSY stock is worth watching?