The coronavirus pandemic had a deterrent effect on the economy in 2020. Millions of Americans were unemployed, businesses were physically closed, and there was a growing list of retail bankruptcies. In June last year, the World Bank forecast that Covid-19 would take the pressure off the global economy and trigger the “worst recession since World War II”.
Economists these days are far more optimistic. With the return of vaccines to guns and lives, the US economy is expected to pick up again in the second quarter. Consumer spending is expected to lead the way in keeping the economy “sizzling”. These seven hot stocks are “A” rated portfolio grader picks.
Everyone is supposed to reward investors as an explosion in consumption drives growth:
- Boston Beer Company (NYSE:SAM)
- BRP Group (NASDAQ:DOOO)
- Hain Celestial (NASDAQ:GROVE)
- Nio (NYSE:NOK)
- Nu Skin Enterprises (NYSE:Naked)
- Simply good food (NASDAQ:SMPL)
- Sony (NYSE:SONY)
If you’ve got your eye on any of these hot stocks, don’t wait too long. While previously untouchable tech stocks struggled in 2021, some of them have already embarked on impressive growth trajectories this year.
Hot stocks: Boston Beer Company (SAM)
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2020 was a year marked by restaurant closings, canceled holidays, calls for self-isolation and frowned upon social gatherings. Not good news for a beer company, one would think.
Despite the challenging circumstances, the Boston Beer Company continued its series quarterly double-digit volume growth throughout the year. In the fourth quarter, the company saw shipments up 54% year over year, while sales rose 53%. The company kicks off in 2021 by adding Truly Iced Tea Hard Seltzer to its established brands including Samuel Adams, Twisted Tea, and Dogfish Head.
SAM stock saw an impressive 163% gain in 2020. An increase of 30% followed in 2021. With restaurants and bars reopening, backyard barbecues reopening, and summer vacations looking like an opportunity, look to see that growth continue.
BRP Group (DOOO)
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The BRP Group owns a long list of brands that are very well known among outdoor enthusiasts. The company makes Ski-Doo snowmobiles, Evinrude outboards, Can-Am tricycles, Sea-Doo watercraft, and others.
All of these products have one thing in common: Their market is primarily leisure. When the economy falters and people are laid off, the leisure purchases with large tickets suffer. Temporarily closed exhibition rooms do not help. There are also no manufacturing sites to close during the Covid-19 outbreak.
The effects of the pandemic were felt at the BRP Group, whose sales fell 15.5% year over year in the second quarter.
The DOOO share had a huge hit early last year but bounced back towards the end of the summer. It closed last November at a new high of $ 32.58, up 121% over six months. With the economy warming along with the weather and stimulus checks being received in the mail, DOOO stock is positioned for another hot summer of growth. In fact, it can be one of the top hot stocks on the list.
Grove Celestial (GROVE)
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When we were in lockdown trying to save money and / or avoid crowds at grocery stores in 2020 due to layoffs, eating was about getting the basics. People fought over basics like flour!
Now that we are recovering, consumers can afford to be more choosy. In addition, after a year of the pandemic, many people have gained weight and are concerned for their health.
This creates the conditions for Hain Celestial to make big profits in the supermarket. The company offers a wide range of food brands, many of which are geared towards healthy eaters. Under the umbrella of Hain Celestial you will find names like Avalon Organics, Celestial Seasonings, Earth’s Best Organic, Health Valley and Yves Veggie Cuisine.
After a four-year decline in which HAIN shares lost three quarters of their value, the company’s assets turned around in 2019. In 2020 this accelerated. So far, stocks are up 12% in 2021, and that trend won’t accelerate until health-conscious consumers open their wallets.
Source: Andy Feng / Shutterstock.com
Don’t make the mistake of leaving China out of the equation. Yes, the company makes many of the products that American consumers are likely to sell for. But Chinese consumers are also a force to be reckoned with. This country was the first to recover from the pandemic and it was the first to see a major economic boom.
Chinese consumers don’t just buy clothes and electronics. They buy big ticket items including cars. Electric vehicle sales are on fire in the US and growing in popularity in China as well. Chinese EV pioneer Nio struggled to survive in 2019. In 2020, quality control issues were resolved, new models were released, and a popular battery-as-a-service model was introduced.
Nio electric vehicles are a sought-after purchase for wealthy Chinese consumers, and they’ve snapped up the cars. In March, 7,257 electric vehicles were delivered for the company – an increase of 373% over the previous year.
NIO stock approached $ 63 in February (it closed below $ 2.50 in 2019) before being caught in the tech stocks sell off. With stocks hovering around $ 40, NIO stock is a big opportunity. Not only is it one of the hottest stocks to benefit from the consumer spending explosion, it’s also a great choice to tackle the EV wave.
Nu Skin (NUS)
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After a year of avoiding crowds, wearing masks and often working from home, the pandemic hit the beauty industry. Products like lipstick saw sales decline. However, skin care was under way. The market was already on the rise, but concerns like “maskne” – which is acne caused by wearing a mask for hours – really helped bring skin care to the fore.
NuSkin primarily specializes in skin care and antiaging treatments, including cleansers, toners, scrubs, creams, and even devices valued at over $ 300 for home spa treatments. Much of it is sold online directly by the company. In the fourth quarter, Nu Skin sold these home skin care treatments for $ 748.2 million. That is an increase of 28% compared to the previous year. Fourth-quarter earnings of $ 1.40 per share rose 94%, beating Wall Street estimates.
Over the past 12 months, NUS shares are up 138%. It is on a trajectory that shows no sign of leveling anytime soon.
Simply good food (SMPL)
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After a year of snacking and eating, Americans paid the price. According to a poll published on WebMD, 76% of Americans put on the pounds during the pandemic. The so-called “Quarantine 15” is real. The ability to dress casually isn’t the only reason sweatpants are so popular.
Simply Good Foods brands own two popular weight loss and nutritious snack brands: Atkins and Quest. These posted weaker sales during the pandemic. The company noted the effect of “temporarily weaker consumer interest in weight management during the COVID-19 era along with fewer occasions on the go.”
However, consumers have proven that they are willing to spend money to lose extra weight – especially if they can do it without spending hours in the gym or without having to give up snacking altogether. When the country reopens and workers return to the office, snacking on the go starts all over again. This is a growth recipe for Simply Good Foods. The SMPL share has grown 88% over the past 12 months. With sales back up, it will be a great position to continue that growth.
Source: Diverse Fotografie / Shutterstock.com
Sony still makes many of the devices the company was previously known for, including televisions and audio equipment. It still has a thriving image sensors and cameras business. Believe it or not, the company is still in the smartphone business. It also has valuable film and music stores. But all of this is pale compared to video games.
Video game consoles, Sony video games, and gaming service membership fees accounted for over 40% of company profits last year.
A must for 2020 was the next generation Sony PlayStation 5 game console. Although the company wasn’t founded until November, it sold 4.5 million units last year. Four months into 2021, PS5 consoles are still hard to find on store shelves. An industry-wide processor shortage doesn’t help, but the PS5 is hot. If the console is just beginning its life cycle, see that Sony has years of benefits including game sales, accessories, and game memberships.
After roughly 12 years from 2000 to 2012 (during which stocks lost over 90% of their value), SONY stock saw solid growth. This includes an 82% increase over the past 12 months. When gamers buy new PlayStation consoles for $ 399 and $ 499 a pop, beware that this hot stock is performing well for the foreseeable future.
At the time of publication, Louis Navellier was long in NIO and SAM. Louis Navellier held other positions (either directly or indirectly) in the securities referred to in this article. The InvestorPlace Research employee primarily responsible for this article has held (neither directly nor indirectly) positions in the securities identified in this article.
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