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3 Stocks for Your Portfolio to Buy for This Summer and Beyond

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The summer of 2021 is officially here and prospects look sunnier than last year, which were dampened by the clouds of coronavirus.

Subsiding pandemic fears, greater savings at disposal, opening of borders and travel forgone last year are making Americans enthusiastic about vacation trips this summer.

Travelers are gung-ho about their holiday destinations and are already crowding the leisure-travel space in droves.

A recent report stated that despite concerns about COVID-19, above 77% of Americans plan to travel for leisure in the next three months. According to the U.S. Travel Association’s Monthly Travel Recovery Data Report, around nine of 10 American tourists plan to travel in the next six months.

This pick-up in travel demand is likely to drive the stocks of companies in the travel, tourism and recreation space. Most of these stocks were hit hard last year as demand dried up. Things are but looking up now.

Stocks for This Summer and Beyond

If the fourth wave of corona doesn’t befall humanity, people will continue pursuing their travel and leisure activities.

Here we look out for some stocks that will gain not only this summer but afterwards, given their strong fundamentals and business innovation that was carried during the pandemic, which made such companies’ business more resilient

These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Outdoor Activity Favours This Stock

If you are planning an outdoor activity, YETI Holdings, Inc. (YETI - Free Report) products will make your trips successful and comfortable. Selling products like coolers, drinkware, backpacks and bags are Yeti products are sure to catch travelers’ eyes if they wish to hit wilderness or visit a beach or camp anywhere.

Even in 2020, the company managed to register sales growth of 19% and margins expanded 560 basis points as travelers took Yeti’s tumblers and coolers in the wild.

While demand for the company’s coolers and equipment continues to sustain, it recently debuted a new line of backpacks which should contribute to sales as travellers pack bags and go for vacation.

The company is resorting to social-media marketing initiatives to lure young customers. . The company is also prioritizing investments in digital, which should drive its online sales. Also, it is shifting its business mix to generate a greater portion of sales through the direct-to-customer sale approach. Earlier, the bent was on wholesale sales.

Additionally, the company is expanding its business outside its national boundaries. Thus, its strategies on diversifying revenues, both geographically and product wise, bode well for the long haul. Another impressive move is that the company is using part of its cash flows to pay down debt, thus strengthening the company’s financial position.

After a strong start in the current fiscal year, management raised the company’s top-line outlook to 20-22% for the period. Strong sales are expected during the fiscal second-fourth quarter, reflecting stable demand for the brand.

The stock currently has a Zacks Rank #2 and a Growth Style Score of A or B. In a year’s time the stock has gained 115.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

Pool Fun to Be in Demand

Even if some people abort travel plans, they will look out for activities, such as weekend sports and backyard gatherings, thereby buoying demand for the products of Pool Corp.  (POOL - Free Report) , the world's largest wholesale distributor of swimming pool supplies, equipment and related products, which performed well even during pandemic. In 2020, sales were up 23%, led by solid demand for residential pool products on the back of stay-at-home trends.

The momentum continued in the first quarter of 2021 with sales improving 57%. Further, a robust housing market will also result in more pool construction, boosting demand for the company’s product line. More good news is that sales in the Commercial pool category turned positive for the first time in the last reported quarter since the onset of the pandemic. With people beginning to travel by and large, this market will continue to progress.

The continuation of the de-urbanization trends, strengthening of the southern migration and more active participation of the millennial population in the housing market should pave the way for the company’s long-term growth.

For 2021, the company expects new pool construction to exceed 110,000 units, up from 96,000 units in 2020. For the full year, it expects earnings per share in the range of $11.85-$12.6, up from the previous guidance of $9.12-$9.62.

The Zacks Consensus Estimate for 2021 and 2022 earnings has been revised 8.8% and 9% upward, respectively, over the past 60 days.

In a year’s time, the stock has gained 71.5% and holds a Zacks Rank of 2 at present.

Zacks Investment ResearchImage Source: Zacks Investment Research

Recreational Vehicles: Most Sought After

Like the other two stocks mentioned above, Camping World Holdings (CWH - Free Report) gained momentum through the pandemic as people took to recreational vehicles (RV) for their dayout. The trend still continues as people who are still wary of travelling aboard and staying in congested hotels are opting for RVs to go for outings.  

Spurred by steady demand for RV in the fiscal first quarter, the company’s revenues jumped 52% and seeing favorable demand, the company upped its past guidance. Its adjusted EBITDA for 2021 is expected in the range of $770-$810 million or 19% higher at the midpoint from its previous projection.

The company has at its disposal, a bulging RV market, which primarily attracts the younger lot. Thus, the customer profile comprising a young cohort, mainly, should provide an opportunity to reap revenues for years to come.

The company is also developing into different verticals by making strategic acquisitions. New store development and facility upgrades should expand its reach. It recently announced plans to launch the Thomasville Recreation Furniture brand of RV and camping furniture. This brand unveiling along with the buyout of furniture manufacturer Allure during the fall of 2020 accelerates its vertical integration within the space and solidifies its sales surge and margin expansion.

Shares of this presently Zacks Rank #1 (Strong Buy) company have soared 42.1% in the past six months. In the past 30 days, earnings estimates for 2021 have been revised 4.9% upward to $5.54.

In a year’s time, the stock has gained 46.7%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

See 3 crypto-related stocks now >>

 


See More Zacks Research for These Tickers


Pick one free report - opportunity may be withdrawn at any time


Pool Corporation (POOL) - free report >>

Camping World (CWH) - free report >>

YETI Holdings, Inc. (YETI) - free report >>

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