The coronavirus pandemic had a chilling effect on the economy in 2020. Millions of Americans were out of work, stores were physically shut down and there was a growing list of retail bankruptcies. Last June, the World Bank predicted Covid-19 would gut the global economy, triggering the “worst recession since World War II.”
Economists are far more optimistic these days. With vaccines making their way into arms and life beginning to return to a sense of normalcy, the U.S. economy is projected to boom in the second quarter. Consumer spending is expected to lead the way in making the economy “sizzle.” These seven hot stocks are Portfolio Grader “A-rated” picks.
Each is set to reward investors as an explosion of consumerism fuels growth:
- Boston Beer Company (NYSE:SAM)
- BRP Group (NASDAQ:DOOO)
- Hain Celestial (NASDAQ:HAIN)
- Nio (NYSE:NIO)
- Nu Skin Enterprises (NYSE:NUS)
- Simply Good Foods (NASDAQ:SMPL)
- Sony (NYSE:SONY)
If you’re eyeing any of these hot stocks, don’t wait too long. While previously untouchable tech stocks have struggled in 2021, some of these have already kicked off impressive growth trajectories this year.
Hot Stocks: Boston Beer Company (SAM)
2020 was a year marked by restaurant closures, cancelled vacations, requests for people to self-isolate and frowned-upon social gatherings. Not great news for a beer company, you would think.
However, despite the challenging circumstances, Boston Beer Company continued its streak of quarterly double-digit volume growth throughout the year. In its fourth quarter, the company reported shipments up 54% year-over-year, while revenue was up 53%. The company is starting out 2021 by adding Truly Iced Tea hard seltzer to its established brands, including Samuel Adams, Twisted Tea and Dogfish Head.
SAM stock posted an impressive gain of 163% in 2020. It has followed that up with a gain of 30% so far in 2021. With restaurants and bars re-opening, backyard BBQs back on and summer vacations looking like a possibility, look for that growth to continue.
BRP Group (DOOO)
BRP Group owns a long list of brands that are very well-known among outdoor activities enthusiasts. The company makes Ski-Doo snowmobiles, Evinrude outboard boat engines, Can-Am three-wheel motorcycles, Sea-Doo watercraft and others.
All of these products have one things in common: their market is primarily recreational. When the economy is sputtering and people are laid off, big-ticket recreational purchases suffer. Temporarily shuttered showrooms don’t help. Neither does having to shut down manufacturing facilities during Covid-19 outbreaks.
The impact of the pandemic was felt by BRP Group, which saw its Q2 revenue drop 15.5% YoY.
DOOO stock took a big hit early last year, but rallied as the summer approached. It closed at a new high of $32.58 last November, marking 121% growth over six months. With the economy heating up along with the weather and stimulus checks arriving in the mail, DOOO stock is positioned for another hot summer of growth. In fact it may be one of the top hot stocks on the list.
Hain Celestial (HAIN)
When we were in lockdown, trying to save money because of layoffs, and/or avoiding crowds in grocery stores in 2020, food was about getting in the essentials. People were fighting over basics like flour!
Now that we’re in recovery, consumers can afford to be pickier. In addition, after a year of the pandemic, many people have gained weight and are concerned about their health.
That sets the stage for Hain Celestial to make big gains in the supermarket. The company offers a wide range of food brands, many of them aimed at healthy eaters. You’ll find names like Avalon Organics, Celestial Seasonings, Earth’s Best Organic, Health Valley and Yves Veggie Cuisine under the Hain Celestial umbrella.
After a four-year slide that saw HAIN stock shed three quarters of its value, the company’s fortunes turned around in 2019. In 2020, that accelerated. So far in 2021, shares are up 12% and that trend is only going to expand as health-conscious consumers open their wallets.
Don’t make the mistake of leaving China out of the equation. Yes, the company makes many of the products that American consumers are expecting to be shelling out for. But Chinese consumers are also a force to be reckoned with. That country was the first to recover from the pandemic, and it’s the first to be experiencing a big economic rebound.
Chinese consumers aren’t just buying clothes and electronics. They’re buying big-ticket items, including cars. EV sales are on fire in the U.S. and they are also surging in popularity in China. Chinese EV pioneer Nio was struggling to survive in 2019. In 2020, it fixed its quality control issues, released new models, and introduced a popular Battery-as-a-Service model.
Nio EVs are an aspirational purchase for affluent Chinese consumers, and they have been snapping up the cars. In March, that amounted to an all-time record 7,257 EVs delivered for the company — up 373% YoY.
NIO stock neared $63 in February (it closed off 2019 below $2.50), before being caught up in the tech stock selloff. With shares now around $40, NIO stock is a big opportunity. It’s not only one of the hot stocks to take advantage of the explosion in consumer spending, it’s also a great pick to ride the EV wave.
Nu Skin (NUS)
After a year of avoiding crowds, wearing masks and often working from home, the beauty industry was upended by the pandemic. Products like lipstick saw sales plummet. However, skin care was in. The market was already on the rise, but concerns like “maskne” — that’s acne caused by wearing a mask for hours at a time — really helped to push skin care to the forefront.
NuSkin primarily specializes in skin care and anti-aging regimes including cleansers, toners, peels, creams and even $300+ powered devices for home spa treatments. Much of that is sold directly by the company, online. In the fourth quarter, Nu Skin sold $748.2 million worth of these home skin care treatments. That’s a 28% YoY increase. Q4 earnings of $1.40 per share were up 94% and smashed Wall Street estimates.
Over the past 12 months, NUS stock is up 138%. It’s on a trajectory that shows no sign of levelling out any time soon.
Simply Good Foods (SMPL)
After a year of snacking and eating comfort food, Americans have paid the price. According to a survey published on WebMD, 76% of Americans packed on the pounds during the pandemic. The so-called “the quarantine 15” is real. Being able to dress casual isn’t the only reason why sweatpants have been so popular.
Simply Good Foods brands owns two popular weight loss and nutritional snacking brands: Atkins and Quest. These saw softer sales during the pandemic. The company noted the effect of “temporary softer consumer interest in weight management during COVID-19 era along with lower on-the-go usage occasions.”
However, consumers have proven they’re willing to spend money to get rid of extra weight — especially if they can do so without having to spend hours at the gym or give up on snacking altogether. In addition, as the country re-opens and workers start moving back to the office, on-the-go snacking will begin again. That’s a recipe for growth for Simply Good Foods. SMPL stock has posted a gain of 88% over the past 12 months. As sales ramp back up, it’s in a great position to continue that growth.
Sony still makes many of the gadgets the company used to be known for, including TVs and audio equipment. It still has a thriving image sensor and camera business. Believe it or not, the company is still in the smartphone business. It has valuable movie and music businesses as well. But all of these pale in comparison to video games.
Video game consoles, Sony video games and membership fees for gaming services accounted for over 40% of the company’s profit last year.
One of 2020’s must-have purchases was the Sony PlayStation 5 next-gen game console. Despite only being launched in November, the company sold 4.5 million of them last year. Four months into 2021, PS5 consoles remain difficult to find on store shelves. An industry-wide processor shortage isn’t helping, but the fact is the PS5 is hot. With the console just starting its life-cycle, look for Sony to be enjoying years of benefits, including sales of games, accessories and gaming memberships.
After a rough 12 years, from 2000 to 2012 (during which shares lost over 90% of their value), SONY stock has been posting solid growth. That includes a 82% gain over the past 12 months. With gamers snapping up new PlayStation consoles at $399 and $499 a pop, look for this hot stock to be a big performer for the foreseeable future.
On the date of publication, Louis Navellier had a long position in NIO and SAM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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