Are These Top Consumer Discretionary Stocks Worth Investing In Right Now?
Whether you are a firm believer in the reopening trade or looking to bet on stay-at-home trends, consumer discretionary stocks remain viable. After all, this section of the stock market today is home to a wide array of trending stocks now. This ranges from anywhere between cruise line stocks such as Carnival (NYSE: CCL) to meme stocks such as AMC Entertainment (NYSE: AMC). At the same time, consumer discretionary names that thrived throughout the pandemic continue to make headlines as well. Take Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) for instance. Both companies reported solid quarters as demand for their tech-based services and wares persist across the board.
Regarding demand, economists continue to see positive growth in the recovering U.S. economy now. Notably, a key index worth noting would be the Institute for Supply Management’s manufacturing purchasing managers index (PMI). Yesterday, the PMI registered a reading of 59.5 for July. Now, this would be slightly down from June’s reading of 60.6, however, any reading above 50 supposedly indicates sector growth. Simply put, the index still shows that demand remains on the high-end on the supply side of the economy. With this in mind, I could see investors eyeing the top consumer discretionary stocks in the stock market now. Should you be among this group, here are worth noting this week.
Best Consumer Discretionary Stocks To Buy [Or Sell] This Month
- Alibaba Group Holding Ltd. (NYSE: BABA)
- Amazon.com Inc. (NASDAQ: AMZN)
- GameStop Corporation (NYSE: GME)
- Discovery Communications Inc. (NASDAQ: DISCA)
Alibaba Group Holding Ltd
Alibaba is a consumer discretionary company that has one of the largest e-commerce platforms in the world. Its technology infrastructure and marketing help businesses to grow and reach users and customers efficiently. The company boasts over 1.5 billion consumers across its retail marketplace, Local Consumer Services, and digital media platforms globally. Alibaba’s business segments also include cloud computing and innovation initiatives. BABA stock currently trades at $195.24 as of 10:41 a.m. ET. Today, the company has just reported stellar earnings.
Diving in, revenue for its June quarter was a whopping $32.86 billion, an increase of 34% year-over-year. Non-GAAP net income for the quarter was $6.72 billion, increasing by 10% year-over-year. The company also says that it continues to invest its excess profits and additional capital in strategic areas to better serve customers and penetrate new addressable markets. It has also increased its share repurchase program from $10 billion to $15 billion as it firmly believes in its long-term growth prospects. With that in mind, will you consider buying BABA stock?
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Amazon is one of the largest tech companies in the world. The company also boasts an impressive e-commerce platform and is one of the most valuable brands in the world as well. Aside from its online marketplace, the company also distributes a variety of downloadable and streaming content, mainly through Amazon Prime Video, Amazon Music, Twitch, and Audible. Its cloud computing subsidiary, Amazon Web Services (AWS) provides on-demand cloud computing platforms and APIs to individuals, companies, and governments. AMZN stock currently trades at $3,335.78 as of 9:45 a.m. ET.
Last week, the company announced its second-quarter financials. To begin with, net sales for the quarter were $113.1 billion, an increase of 27% year-over-year. Its net income also increased to $7.8 billion for the quarter or $15.12 per diluted share. The company says that its AWS business has helped so many businesses and governments maintain business continuity.
It has also received significant customer momentum, with new commitments, and migrations from customers across many major industries. For instance, Swisscom, Switzerland’s leading telecommunications provider has selected AWS as its preferred public cloud provider to power a wide range of core applications. This includes a 5G network, business support system, and enterprise resource planning. All things considered, will you add AMZN stock to your portfolio?
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Next on this list is GameStop, a digital-first omnichannel retailer. In essence, the company is a consumer electronics and gaming company that offers entertainment products in its more than 4,000 stores and comprehensive e-commerce properties across 10 countries. The company also offers fans a wide variety of POP! Vinyl figures and collectibles. GME stock currently trades at $152.13 as of 10:01 a.m. ET. Last week, the company announced that it will rebrand EB Games in Canada. By the end of the year, EB Games locations in Canada and online stores will assume the GameStop brand and name.
In July, the company announced that it continues the expansion of its fulfillment network with a new facility in Reno, Nevada. This is a 530,000 square foot facility in Nevada and is expected to be operational by 2022. The company’s new presence in Reno, Nevada will position it to grow product offerings and expedite shipping across the west coast. This expansion follows the company’s entry into a lease of a 700,000 square foot facility in York, Pennsylvania. Considering that, will you be watching GME stock?
Discovery Communications Inc.
Another upcoming name to consider in the consumer discretionary industry now would be Discovery Communications. In brief, Discovery is a mass media company that primarily offers factual entertainment programs. As more older consumers would know, the company’s Discovery channel is home to a vast library of nature documentaries. Moreover, Discovery also offers other non-fiction programming via its Animal Planet, Science Channel, and TLC brands. Now, following the shift from cable TV to video streaming, Discovery brings all of this to consumers via its streaming service, Discovery Plus.
Given the company’s current focus on adapting to shifting consumer trends, could DISCA stock be worth watching? As it stands, DISCA stock currently trades at $27.52 as of 10:18 a.m. ET. Thanks to Discovery’s latest earnings figures posted earlier today, some would argue that it could have more room to run. Namely, the company reported earnings per share of $1.01 for the quarter, a massive 188% year-over-year increase. Additionally, the company also posted a total revenue increase of 21% over the same time, totaling $3.06 billion.
For the most part, Discovery cites the fast growth of its Discovery Plus service for these figures. To date, the company currently boasts 18 million paying subscribers which contributed to a 130% surge in streaming revenue quarter-over-quarter. With Discovery seemingly firing on all cylinders now, will you be investing in DISCA stock?