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4 Stocks to Boost Your Portfolio as Q2 GDP Grows at Solid Pace
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The U.S. economy grew at a solid pace in the second quarter after slowing down in the first three months of the year. The Bureau of Economic Analysis said on Jul 25 that the U.S. GDP grew at an annualized rate of 2.8% in the second quarter, double the pace seen in the first quarter and above the consensus estimate of a rise of 2%.
A jump in inflation in the first quarter, coupled with record-high interest rates, had raised concerns that economic expansion was in danger. However, the fears seem to have subsided with the economy rebounding in the second quarter after getting a boost from inventory building and solid government spending.
The data came as inflation continued to ease in June after starting to show signs of declining in April. The consumer price index (CPI) declined 0.1% sequentially in June after remaining unaltered in May. This was also the first time that the monthly inflation rate fell since May 2020.
Year-over-year CPI rose 3% in June after increasing 3.1% in the prior month, recording the smallest rise since June 2023.
The Federal Reserve is readying to start its rate cut cycle after increasing interest rates to a 23-year high of 5.25-5.5% in its bid to curb 40-year high inflation.
The solid GDP growth in the second quarter has raised hopes that the Fed could start rate cuts at the earliest. The Federal Reserve hinted at just one rate cut this year, but positive GDP and inflation data has raised hopes of multiple cuts this year.
Lower borrowing costs bode well for the broader economy as it will allow consumers to spend more freely.
Our Choices
Given this scenario, we have narrowed our search to four consumer discretionary stocks, namely Acme United Corporation (ACU - Free Report) , PlayAGS, Inc. (AGS - Free Report) , Netflix, Inc. (NFLX - Free Report) and Royal Caribbean Cruises Ltd. (RCL - Free Report) , which have strong potential for 2024.
Acme United Corporation operates principally in two business segments. ACU’s operations in the medical segment involve the production and sale of metal disposable medical scissors and instruments, sterile procedure trays, germicidal products, dressings and wound care packs. Operations in the consumer segment involve the production and sale of shears, scissors, knives, rulers, first aid kits and chalkboard items for school, office and home use.
Acme United Corporation’s expected earnings growth rate for the current year is 24.7%. The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past 60 days. ACU presently sports a Zacks Rank #1.
PlayAGS, Inc. is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
PlayAGS’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 71% over the past 60 days. AGS currently sports a Zacks Rank #1.
Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.
Netflix’s expected earnings growth rate for the current year is 58.6%. The Zacks Consensus Estimate for the current-year earnings has improved 4.2% over the past 60 days. Netflix currently carries a Zacks Rank #2.
Royal Caribbean Cruises Ltd. owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises’ cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises’ expected earnings growth rate for the current year is 67.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the past 60 days. RCL currently has a Zacks Rank #1.
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4 Stocks to Boost Your Portfolio as Q2 GDP Grows at Solid Pace
The U.S. economy grew at a solid pace in the second quarter after slowing down in the first three months of the year. The Bureau of Economic Analysis said on Jul 25 that the U.S. GDP grew at an annualized rate of 2.8% in the second quarter, double the pace seen in the first quarter and above the consensus estimate of a rise of 2%.
A jump in inflation in the first quarter, coupled with record-high interest rates, had raised concerns that economic expansion was in danger. However, the fears seem to have subsided with the economy rebounding in the second quarter after getting a boost from inventory building and solid government spending.
The data came as inflation continued to ease in June after starting to show signs of declining in April. The consumer price index (CPI) declined 0.1% sequentially in June after remaining unaltered in May. This was also the first time that the monthly inflation rate fell since May 2020.
Year-over-year CPI rose 3% in June after increasing 3.1% in the prior month, recording the smallest rise since June 2023.
The Federal Reserve is readying to start its rate cut cycle after increasing interest rates to a 23-year high of 5.25-5.5% in its bid to curb 40-year high inflation.
The solid GDP growth in the second quarter has raised hopes that the Fed could start rate cuts at the earliest. The Federal Reserve hinted at just one rate cut this year, but positive GDP and inflation data has raised hopes of multiple cuts this year.
Lower borrowing costs bode well for the broader economy as it will allow consumers to spend more freely.
Our Choices
Given this scenario, we have narrowed our search to four consumer discretionary stocks, namely Acme United Corporation (ACU - Free Report) , PlayAGS, Inc. (AGS - Free Report) , Netflix, Inc. (NFLX - Free Report) and Royal Caribbean Cruises Ltd. (RCL - Free Report) , which have strong potential for 2024.
These stocks have seen positive earnings estimate revisions in the last 60 days. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acme United Corporation operates principally in two business segments. ACU’s operations in the medical segment involve the production and sale of metal disposable medical scissors and instruments, sterile procedure trays, germicidal products, dressings and wound care packs. Operations in the consumer segment involve the production and sale of shears, scissors, knives, rulers, first aid kits and chalkboard items for school, office and home use.
Acme United Corporation’s expected earnings growth rate for the current year is 24.7%. The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past 60 days. ACU presently sports a Zacks Rank #1.
PlayAGS, Inc. is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
PlayAGS’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 71% over the past 60 days. AGS currently sports a Zacks Rank #1.
Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.
Netflix’s expected earnings growth rate for the current year is 58.6%. The Zacks Consensus Estimate for the current-year earnings has improved 4.2% over the past 60 days. Netflix currently carries a Zacks Rank #2.
Royal Caribbean Cruises Ltd. owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises’ cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises’ expected earnings growth rate for the current year is 67.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the past 60 days. RCL currently has a Zacks Rank #1.