5 Companies That Will
Sizzle This Summer
The world is not ending as the pessimists would have you believe. In fact, the recovery that began in March is likely to take serious root during the summer months.
But before you retreat to your favorite summer locale with the perfect book, let’s take a look at stocks that will benefit from consumers looking to enjoy the fruits of their labor over the next several months.
For me, summer means lots of boating, fishing and time with my family. And this year I’ll be doing more of each to make up for lost time spent hunkering down during this downturn.
Companies that make the goods in each of these categories should do well. That’s how it goes during a recession. Demand builds as we retreat to preserve cash and fix balance sheets.
Here then are five companies that will sizzle this summer…
Marine Products Corp. (MPX)
In my home state of Minnesota, boating is a huge tradition of the season. I love fast boats, slow boats and fishing boats, and Marine Products Corp. (MPX) builds them all.
As one might expect, the recession has crushed MPX and its business. If a consumer can barely afford a high-priced Starbucks coffee, how can they afford to buy a boat?
Boats are quite discretionary and that segment of the market has been hardest hit by the downturn, and shares of MPX reflect declining demand for its products. Ah, but that is the rub. Is demand really waning?
Not really. People still love boats and will buy them when the economy stabilizes. Owning MPX at these bottom feeder prices makes a ton of sense.
If you’re going to the beach this summer, chances are you’ll bring a swimsuit with you. Last summer with the recession beginning and the credit crisis just unfolding, consumers held off on updating their wardrobe. This summer, those two-year-old duds will not do.
One of my favorite beachwear names is Quicksilver (ZQK). This ultra-hip name will provide beachgoers with an instant upgrade. My bet is that sales will increase this summer from previously anemic levels.
ZQK stock is on life support, but a quick change in consumer sentiment will do wonders for shares of this stock.
I would be a buyer before summer heats up.
Winnebago Industries (WGO)
Last summer with oil prices at $150 per barrel, drivers stayed in the garage. This season will be different. You can’t keep Americans off the road for long.
If camping is your thing, perhaps traveling the open road in a Winnebago (WGO) will do you well. There is no better way to sightsee or camp. And with gas prices lower, it will be a trip that is much easier to swallow.
I suspect I’m not alone. In fact, Winnebago sales are likely to do well over the coming years as more of the baby boomer generation retires. The stock trades for less than 50% off highs reached in the last year.
I would use that discount to acquire a long-term position. Eventually the buyers will return, and the demographics certainly bode well for WGO.
Vail Resorts (MTN)
If you do rent or buy that Winnebago, perhaps one of your destinations will be Colorado and its spectacular mountains. Specifically, Vail Resorts (MTN) offers families fantastic summertime destinations.
Sure, with the economy hemorrhaging taking a trip to Vail may be inappropriate, but life is short. We’ve avoided financial Armageddon, and the economy is slowly returning to normalcy. This summer will be the beginning of a new uptrend for stocks, and MTN deserves consideration.
MTN trades for a low valuation and 50% less than where shares traded last year. I would be a buyer at current levels.
I started taking my daughter fishing when she was three years old. She has been hooked ever since. This year will be our first experience dropping lines from a boat, and I can’t wait. That said, I need to gear up. That means taking a trip to Cabela’s (CAB) to buy all of the latest fishing gear.
Like most retailers, CAB has struggled with a stubborn economy. At the low, CAB traded for less than $5 per share. It has recovered smartly to its current price of $12. I suspect other fathers like me are heading to CAB en masse.
This is not just a bounce from the lows. It’s the start of a new trend higher. Buy some shares of CAB, and then head to a local store to buy gear for your own fishing trip.
Want more summer sizzlers to heat up your portfolio? Get 10 more top summer stocks here.