Top 5 consumer discretionary mid-cap stocks with a sharp rise
Wall Street has maintained its rally so far in 2021 despite increased volatility in May. Most market participants and financial experts are busy talking about the performance of large and small caps. However, the stellar spectacle of mid-cap stocks (market capital> $ 1 billion and
Since the start of the year, the three indices specific to large caps – the Dow, the S&P 500 and the Nasdaq Composite – have gained 12.1%, 11.5% and 6% respectively. The benchmark Russell 2000 small cap index jumped 11.7%. However, the mid-cap-centric S&P 400 has gained 16.3% year-to-date, just behind another S&P 600 index specific to small caps which has jumped 19.2% in that year. period.
Importance of mid-cap stocks
Investing in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of small and large cap stocks. Top-ranked mid-cap stocks have great potential to improve profitability, productivity, and market share and can grow into large caps over time.
If the economic recovery has slowed due to unforeseen internal or external disruptions, mid-cap stocks will be less susceptible to loss than their large-cap counterparts due to less international exposure.
On the other hand, if the crisis does not worsen due to vaccination, these stocks will gain more than small caps thanks to established management teams, a large distribution network, brand recognition and easy access to markets. financial.
Importance of the consumer discretionary sector
The consumer discretionary sector includes companies that sell goods and services that consumers consider non-essential. These are products that consumers can avoid without major consequences for their well-being. In fact, these assets are only desirable if an individual’s disposable income is sufficient to purchase them.
The massive nationwide rollout of COVID-19 vaccines is the basis for a faster-than-expected reopening of the US economy. On May 4, President Joe Biden announced that his administration’s latest goal was to ensure that 70% of U.S. adults receive at least one dose of a COVID-19 vaccine and that 160 million adults are fully immunized. by July 4.
Plus, Americans have a whopping $ 2.3 trillion in excess or forced savings from their downtime. Suppressed massive demand and unprecedented personal savings are expected to boost consumer spending on discretionary products in the near future.
Our top picks
We limited our search to five mid-cap consumer discretionary stocks that have delivered double-digit or near-double-digit returns over the past three months.
These stocks have strong growth potential for the remainder of 2021 and have seen strong earnings estimate revisions over the past 30 days. Each of our choices carries a Zacks # 1 rank (strong buy). You can see The full list of current Zacks # 1 Rank stocks here.
The graph below shows the price evolution of our five choices over the past three months.
Crocs Inc. CROX designs, develops, manufactures, markets and distributes casual lifestyle footwear and accessories for men, women and children around the world. It offers various footwear products including clogs, sandals, flip flops and slides, shoes and boots under the Crocs brand.
The company has an expected profit growth rate of 76.4% for the current year. Zacks’ consensus estimate for current year earnings has improved 44.9% in the past 30 days. The share price has jumped 34.9% in the past three months.
Guess’ Inc. GES designs, markets, distributes and licenses collections of clothing and lifestyle accessories for men, women and children. It operates in five segments: retail in the Americas, wholesale in the Americas, Europe, Asia and licensing.
The company has an expected profit growth rate of over 100% for the current year (ending January 2022). Zacks’ consensus estimate for current year earnings has improved 6.3% in the past 30 days. The share price has risen 10.1% in the past three months.
International Gaming Technology API IGT operates and provides gaming technology products and services around the world. It operates in two segments, Global Lottery and Global Gaming.
The company has an expected profit growth rate of over 100% for the current year. Zacks’ consensus estimate for current year earnings has improved by over 100% over the past 30 days. The share price has climbed 29.5% in the past three months.
Gildan Activewear Inc. GIL is a manufacturer and distributor of premium basic sportswear for sale primarily in the wholesale printed sportswear segment of the North American clothing market.
The company has an expected profit growth rate of over 100% for the current year. Zacks’ consensus estimate for current year earnings has improved 24.7% in the past 30 days. The share price has risen 15.3% in the past three months.
Sturm, Ruger & Company Inc. RGR designs, manufactures and sells firearms under the Ruger name and brand in the United States. It operates in two segments, firearms and castings.
The company has forecast a profit growth rate of 17.9% for the current year. Zacks’ consensus estimate for current year earnings has improved 31% in the past 30 days. The share price has jumped 9.6% in the past three months.
Growth of + 1500%: one of the most interesting investment opportunities of 2021
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.