Earlier this week, the third-quarter GDP for the U.S. was raised from 3.2% to 3.5%, further demonstrating that the U.S. economy is on the mend. Existing home sales also hit a level last seen in 2007.
These are very encouraging signs that the U.S. economy is finally getting back on its feet. And considering a Republican dominated Congress and White House, change to help boost that economy should also come at a faster pace.
And that’s why I took a look at consumer stocks. I have come up with seven fast-growing consumer stocks to buy in today’s market.
These companies are not about big-ticket items like cars and refrigerators. They’re winners because they’re the first place consumers turn to spend a little extra money. They are the front line consumer stocks that will feel consumer sentiment first and then continue to grow as the trend expands.
Fast-Growing Consumer Stocks: Amazon (AMZN)
Amazon.com, Inc. (NASDAQ:AMZN) is at the top of so many lists of top stocks to buy, it should be no surprise it’s one of them here.
The real play here is growing consumer spending, not its incredibly profitable and powerful Amazon Web Services division that has become one of the biggest players in cloud storage and computing. AMZN continues to revolutionize the way people buy all manner of goods. And AMZN is also revolutionizing how those goods are delivered.
It wasn’t long ago that CEO Jeff Bezos made a comment on news show 60 Minutes about his goal to deliver packages by drone in coming years. At the time, many thought the idea outrageous. Now, it’s seen as a necessary feature for any logistics company worth its salt. The same can be said of grocery delivery. And same-day package delivery.
AMZN will never have a gigantic pile of cash sitting around because it’s always looking for new ways to improve and grow. The stock is up more than 50% off its February lows and has plenty of growth ahead.
Fast-Growing Consumer Stocks: AMC Entertainment (AMC)
AMC Entertainment Holdings Inc (NYSE:AMC) is a movie theater company — or as AMC likes to describe itself, a theatrical exhibition business — with more than 900 theaters and over 100,000 screens around the world.
New technology — like IMAX and 3D — has kept the theatrical exhibition business growing at a good clip and that should continue, especially through the winter months.
In recent years the movie theater business has gone through a period of consolidation as more traditional theaters and smaller players couldn’t compete with the new generations of film that was being delivered.
For example, the old projectors weren’t able to play digital movies, but studios were stopping distribution of movies on film. According to The Atlantic, in 2004, there were about 90 digital screens in the U.S. Today, more than 85% of movie screens are digital. And conversion costs were $50,000 per screen.
Smart companies like AMC took advantage of this transitioning market and grew quickly to dominate the new lay of the land. Up 45% year-to-date and delivering a solid 2.3% dividend, AMC stock is going places.
Fast-Growing Consumer Stocks: Build-A-Bear Workshop (BBW)
Build-A-Bear Workshop, Inc. (NYSE:BBW) was once one of the hottest niche players out there. If you were a parent of an elementary school child 10 years ago , there was little doubt that someone was having a birthday party at a local Build-A-Bear.
For those of you not in that demographic, basically BBW ran a direct-to-consumer business where you (or your child) could go in and build a custom teddy bear or other stuffed animal. That’s why it has been a magnet for children’s birthday parties.
BBW was going gangbusters before the bottom fell out of the market in 2008 and has been regaining its footing ever since. By getting into online retail (customizing a bear online and having it shipped) and international franchising, BBW has made a respectable comeback and is seeing a revival.
BBW stock is up 18% year to date and analysts are very bullish.
Fast-Growing Consumer Stocks: Best Buy (BBY)
Best Buy Co Inc (NYSE:BBY) is a North American electronics powerhouse. But the past couple of years were a bit harrowing for investors.
With many individual brands launching online stores and online juggernauts like Amazon to compete against, BBY was having its challenges. Like all the big box retailers, they had to find a way to grow margins and still maintain the overhead of huge stores. AMZN did not have that problem.
BBY had to become relevant again. At times that didn’t seem like it was going to happen, but it now looks like it has righted the ship by adding more value to the in-store shopping experience. Far fewer people now “test drive” products at the store and then order them online.
The stock is up 45% this year — before holiday numbers are in. And it is still delivering a 2.5% dividend.
Fast-Growing Consumer Stocks: Burlington (BURL)
Burlington Store Inc (NASDAQ:BURL) is on a roll. BURL stock is up nearly 100% this year and there is still plenty of headroom for this branded apparel retailer.
BURL has nearly 600 stores in 45 states and Puerto Rico. And it is well situated in a sector of the market — discount retailing — that is seeing big and enduring growth. Regardless of how consumers are affected by the recovering economy, what the past eight years has taught price-sensitive consumers is, you can buy quality at a discount. This is exactly what BURL is all about.
BURL usually has bigger stores than its competitors and in recent quarters has been using that size to its advantage. In the stores it can display more merchandise and because of its size, it can create better supply chain efficiencies. That helps keep prices low and margins expanding.
Fast-Growing Consumer Stocks: Boyd Gaming (BYD)
Boyd Gaming Corporation (NYSE:BYD) is a casino company: It has 24 gaming and entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana and Mississippi. Half of those properties are in southern Nevada.
And just this week, BYD announced that it just closed a deal for Cannery Casino, after an earlier deal for Aliante Gaming in Vegas.
The point is, BYD is expanding its business as gaming opportunities start to open up beyond Nevada. This is going to be a significant shift for the future of Las Vegas. The big firms that own the big Vegas casinos have been having trouble in the past year, but leaner players like BYD are building market share in states well beyond Nevada. And its resorts in Vegas are smaller but just as elegant and engaging as the monster casino resorts that Vegas is known for.
The stock is getting a head of steam behind it, up nearly 8% in the past three months.
Fast-Growing Consumer Stocks: CST Brands Inc (CST)
CST Brands Inc (NYSE:CST) may not be a recognizable name, but the odds are you have pumped their gas or bought their oil or grabbed a snack from one of their 3,000 stores across 32 states in the U.S. and six provinces in Canada.
CST distributes Valero Energy Corporation (NYSE:VLO), Exxon Mobil Corporation (NYSE:XOM), BP plc (ADR) (NYSE:BP), Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Phillips 66 (NYSE:PSX) and other fuel brands, as well as runs many of the convenience stores in various locations.
Selling fuel is a low margin business, which means, the more you sell, the more your make. And now that oil prices are on the rise, there’s more room for higher margins. Add to this the fact that consumers and businesses will likely be using more fuel for travel and you have a formula for built-in growth.
The stock is up 23% year to date and 2017 looks like a very good year.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.