Looking For The Best Consumer Stocks To Buy In Q1 2021? 3 For Your List.
Consumer stocks are usually dependent on the economy. These stocks rally in a booming economy and are very much dependent on people spending. As President-elect Joe Biden will be inaugurated next week, he has proposed injecting $1.9 trillion into the pandemic battered U.S. economy. The president-elect says that bold investments were needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control. The aid will come in the form of stimulus checks of $1,400. Also, Biden says he wants to increase unemployment benefits to $400 per week for the 18 million Americans that are currently collecting benefits. One of the best ways to get the economy going is to encourage spending, and with these stimulus checks, Americans will be spending again.
Could we be at a turning point this year where the economy finally rebounds? This is as the vaccines from Moderna (NASDAQ: MRNA) and Pfizer (NYSE: PFE) continue to be distributed to the masses. Sure we are still a long way from achieving herd immunity, but this is definitely a start. Some of the top consumer stocks have already shown impressive growth. For instance, Bed Bath & Beyond (NASDAQ: BBBY) has already skyrocketed by over 50% year-to-date. ContextLogic (NASDAQ: WISH) is another consumer stock that has been up by over 40% this year.
As we begin 2021, should investors be more discerning about the consumer stocks that they put into their shopping carts? Will we see these stocks rise to pre-pandemic levels and beyond once again? All things considered, here is a list of top consumer stocks to watch right now.
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Best Consumer Stocks To Watch
- Beyond Meat (NASDAQ: BYND)
- GameStop Corp (NYSE: GME)
- Target Corporation (NYSE: TGT)
Beyond Meat
Beyond Meat is a plant-based meat substitute company that is based in Los Angeles. The company believes that the future of proteins will come from plants. As conventional livestock like cows and poultry take up more land and resources, Beyond Meat could very well be the future of food. The company’s shares were up by 13% on Thursday after it announced a partnership with Yum! Brands’ (NYSE: YUM) Taco Bell to create a plant-based protein. Testing will begin this year for Taco Bell’s new menu items.
In the company’s third-quarter fiscal posted in November, the company reported very impressive results. Beyond Meat posted net revenue of $94.4 million for the quarter and a gross profit of $25.5 million. The company is making headways into the global meat industry, which is estimated to be worth over $1.4 trillion, with the U.S. alone accounting for about $270 billion. Through its plant-based meats, it is essentially disrupting the meat industry. The company has also doubled its manufacturing capacity in the last year. It also has over 122,000 outlets worldwide that serve its products.
Earlier this week, the company announced that it will partner with popular local restaurants in nine major cities. The partnership will offer free, delicious, and ‘better-for-you’ breakfast options made with Beyond’s products. This will no doubt increase the company’s brand recognition in the long run. Also, more people have been turning to plant-based foods in the last few years. So much in fact that Taco Bell is not the only company that has partnered with Beyond Meat. Fast food companies like McDonald’s (NYSE: MCD) and Subway have also partnered with the company. With so many food companies approaching Beyond Meat, will investors be looking at BYND stock for long-term growth?
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GameStop
GameStop is a Texas-based video game and gaming merchandise retailer. The company boasts over 5,000 retail stores across 10 countries. GameStop shares have exploded in growth, doubling in value since Tuesday. The reason for this growth is when the company announced it will add 3 new board members. Alan Attal, Ryan Cohen, and Jim Grube were formerly from Chewy (NYSE: CHWY). Ryan Cohen especially was the founder of Chewy, one of the most successful e-commerce platforms for pet products and care. The new board members will help enhance the game retailer’s e-commerce and online marketing capabilities.
Ms. Vrabeck, Chair of the Board, commented, “We are pleased to welcome Ryan, Alan, and Jim to the Board and look forward to working with them to pursue long-term value creation. Their substantial e-commerce and technology expertise will help us accelerate our transformation plans and fully capture the significant growth opportunities ahead for GameStop.” Things certainly look promising for the company that has traditionally relied on its brick-and-mortar stores.
In the company’s third-quarter financials that was posted last month, the company reported net sales of $1 billion, down by 30.2%. This decline is due to the last few months of a seven-year console cycle and a global pandemic that pressured sales and earnings. However, with the advent of a new generation of consoles being launched late last year, the company is already seeing positive developments. GameStop reported earlier this week in its holiday season update that it saw a 4.8% increase in comparable-store sales and a 309% increase in e-commerce sales over the nine-week holiday period. With such exciting prospects surrounding the company, will you have GME stock on your watchlist?
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Target Corporation
Last but not least, we have general merchandise retailer Target. The company claims that 75% of the U.S. population lives within 10 miles of a Target store, so it definitely has a wide reach for the consumer market. Target shares have been up by over 15% in the last month.
In November, the company posted its third-quarter earnings, much to investors’ delight. The company reported that its comparable sales for the quarter grew by 20.7%. Target also stated that it had gained market share across all five of its core merchandising categories. The company reported earnings per share of $2.01, up by 46.3% year-over-year. Target has definitely adapted well to the era of consumerism that we live in today. This is evident as it has since seen a meteoric rise to the growth of its same-day services. For instance, shipments grew by 280% and drive-up increased by more than 500%.
Early this week, the company posted an update for its holiday season sales as well. For the company’s November/December period, Target saw its comparable sales grow by 17.2% year-over-year with comparable digital sales doubling in the same period. Keeping up the momentum from its latest quarter earnings, the company yet again noted that it had market share gains across its product portfolio. With no signs of slowing down, will TGT stock be worth watching as a top consumer stock?
