3 Consumer Stocks To Watch In December 2021
With all eyes on the Fed’s latest policy meeting, consumer stocks could be in focus in the stock market today. For the most part, this could be due to Federal Reserve Chairman Jerome Powell’s recent update on the Fed’s tapering plans. In short, Powell said that discussions about “whether it would be appropriate to wrap up our purchases a few months early” could be in the works. He cited a strong economic backdrop alongside heightened inflationary pressures as a key factor for this.
Now, with that said, where do consumer stocks come into play might you ask? Simply put, consumer stocks cater to, well, consumers. As such, a rebound in the overall economy could indicate consumer spending continues to rise this holiday season. Overall, this would explain the current strength in consumer discretionary names such as Apple (NASDAQ: AAPL). The company’s shares are now trading at around record levels thanks to bullish analyst updates on demand for its tech.
On the flip side, there are also consumer staples names to consider in the stock market now. These are firms that provide consumers with their daily necessities from groceries to cleaning supplies and vital day-to-day services. Notably, Beyond Meat (NASDAQ: BYND) is one such company that is taking the spotlight today. This is mostly thanks to a report from investment banking firm Piper Sandler (NYSE: PIPR). Yesterday, the firm cited industry contacts saying that the McPlant could launch nationwide in the first quarter of 2022. This would indicate that Beyond Meat’s ongoing partnership with McDonald’s (NYSE: MCD) is going into full swing soon. Given all of this, should investors consider investing in consumer stocks going into 2022?
Top Consumer Stocks To Watch In December 2021
- Harley-Davidson Inc. (NYSE: HOG)
- MercadoLibre Inc (NASDAQ: MELI)
- Costco Wholesale Corporation (NASDAQ: COST)
Harley-Davidson Inc.
Harley-Davidson is a consumer company that manufactures motorcycles. For over a century, the company has defined motorcycle culture by delivering a motorcycle lifestyle with distinctive and customizable motorcycles, experiences, accessories, and riding gear. Its Harley-Davidson Financial Services provides financing, insurance, and other programs to help get riders on the road.
On Wednesday, it announced its electric-motorcycle division, LiveWire, will become the first publicly traded EV motorcycle company in the U.S. LiveWire will go public via a merger with SPAC company, AEA-Bridges Impact (NYSE: IMPX). The value of the deal is approximately $1.77 billion. Its common stock is expected to be listed on the New York Stock Exchange under the symbol “LVW”. The company plans to redefine motorcycling as the industry-leading, all-electric motorcycle company, with a focus on the urban market and beyond.
As a pure-play EV brand with a first-mover advantage, LiveWire has a brand presence in North America and Europe, with planned expansion into additional markets like Asia. Also, the company has a deep track record of R&D investments and a clearly defined strategy to capture increasing market share and consumer adoption in the growing two-wheel EV transition, following significant investment to date. Last month, Harley-Davidson also declared a dividend of $0.15 per share for the fourth quarter of 2021. The dividend is payable on December 23, 2021, to the shareholders of record of the Company’s common stock as of December 8, 2021. Given all of this, is HOG stock worth watching right now?
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MercadoLibre Inc.
MercadoLibre operates one of the largest e-commerce platforms in Latin America. The company’s platform is accessible to consumers across 18 Latin American countries. And it is actively taking measures in line with that plan. For example, it acquired Redelcom earlier this week. Redelcom is a Chilean payment services provider of high-tech point-of-sale (POS) terminals. The likes of which it primarily supplies to small-and-medium enterprises and micro-entrepreneurs.
As a result of this acquisition, MELI stock could be worth keeping an eye on in the stock market today. After all, Redelcom’s services would synergize well with MercadoLibre’s POS division, MercadoPago. For a sense of scale, MercadoPago sold over a million POS terminals in the third quarter of 2021 alone. With Redelcom, MercadoLibre seems to be taking aim at smaller upcoming names in the Latin American retail scene.
Moreover, the company also saw green across the board in its latest quarterly earnings report posted last month. In it, MercadoLibre posted a total revenue of $1.86 billion, marking a solid year-over-year increase of 66%. Over the same period, it also reported gains of over 530% in both its net income and earnings per share. Additionally, its unique active users grew to 78.7 million in the latest quarter. With MercadoLibre’s ambitious plays and impressive growth, could MELI stock find its way into your portfolio?
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Costco Wholesale Corporation
Costco is a membership-only big-box retail store chain that has been going strong during the pandemic. This could be due to customers making more bulk purchases to cut down on grocery trips. Impressively, it is also one of the biggest retailers in the world. Costco stock is up by more than 6% after announcing a strong quarter last week.
Diving in, Costco’s total revenue for the quarter, including membership fees and net sales, was at $50.36 billion, an increase of more than 16% year-over-year. A chunk of this quarter’s revenue came from its e-commerce segment. Net income for the quarter was $1.32 billion or $2.98 per diluted share. The company also ended the quarter with $12.75 billion in cash and cash equivalents and an operating income of $1.69 billion. The company continues to gain new customers and grow its market share, given this quarter’s latest performance.
There are reports that the company could be increasing the price of its membership fees soon, given that it increases the cost of its membership every five years, and it will be five years next summer. With its loyalty rates as strong as ever, more so now during the pandemic than ever, Costco can probably increase its fees with little resistance from its members. All things considered, is COST stock worth investing in today?
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