If you’re looking for stocks to buy as we head into the teeth of winter, it helps to know what the forecast will be across the U.S.
According to the National Oceanic and Atmospheric Administration’s (NOAA) winter outlook, the South and most of the Eastern U.S. will experience higher than average temperatures for this time of the year due to La Nina.
In the Pacific Northwest, the northern Rockies, Great Lakes, Ohio Valley, and western Alaska are expected to have wetter-than-normal conditions through February.
If you’re a skier, the forecast for the next couple of months might not be to your liking. However, if you’re not a fan of the white stuff, it looks as though you’ll be happy with the winter ahead.
Either way, there’s money to be made by investing in stocks that benefit from whatever winter conditions come our way — pandemic related concerns aside.
- Anta Sports Products (OTCMKTS:ANPDY)
- Brunswick (NYSE:BC)
- BRP (NASDAQ:DOOO)
- Callaway Golf (NYSE:ELY)
- Canada Goose (NYSE:GOOS)
- Columbia Sportswear (NASDAQ:COLM)
- Dick’s Sporting Goods (NYSE:DKS)
- Electronic Arts (NASDAQ:EA)
- VF (NYSE:VFC)
- Vail Resorts (NASDAQ:MTN)
Here are my 10 stocks to buy heading into the teeth of winter.
Stocks to Buy: Anta Sports Products (ANPDY)
Anta Sports has the world’s fourth-highest market capitalization amongst sportswear companies. Its brands include Anta, Fila, and Descente.
However, in April 2019, the company led an investor consortium — Tencent Holdings (OTCMKTS:TCEHY) is part of the group — to buy Amer Sports, a Finnish-based sporting goods company, for $5 billion. The company’s brands include Salomon, Arc’teryx, Atomic, Suunto, Wilson, Louisville Slugger, and more.
Anta owns 52.7% of AS Holding, the company created by the consortium to own Amer. Anta’s stake in the business accounts for approximately 20% of its overall assets.
In December 2020, Amer sold its Precor fitness equipment business to Peloton Interactive (NASDAQ:PTON) for $420 million. Peloton’s stock was down 73% by the end of 2021; Amer chose the perfect time to unload an unwanted asset.
Winter or summer, Anta Sports has got you covered.
As I stated in the introduction, a good part of the country will experience warmer weather in January and February. In many coastal towns, a boat to spend one’s leisure hours won’t be a bad thing, especially with the pandemic seemingly never-ending.
If nothing else, Covid-19 reminded Americans why they like boating so much. As a result, Brunswick’s business has never been healthier, with growth expected for years to come.
Through the first nine months of 2021, Brunswick’s sales grew by 39% to $4.42 billion. In terms of profits, its operating income is up 72% over the same period to $691.1 million.
It generates sales from three segments: Propulsion (Mercury Marine outboard and Mercury MerCruiser inboard engines), Boats (Sea Ray, Princecraft, Boston Whaler, and Bayliner), and Parts & Accessories. All three have excellent operating margins, with the propulsion business leading the way at 22.3% of sales.
However, I find the company’s Freedom Boat Club so interesting. Franchising since 1989, the business now has more than 320 global locations and more than 47,000 memberships.
It’s a revenue-generating business that helps tell consumers why boating and Brunswick are worth exploring. While it generates just 3% of revenues, the goodwill it delivers is priceless.
Stocks to Buy: BRP (DOOO)
BRP is short for Bombardier Recreational Products. The company dates back to 1937 when Joseph-Armand Bombardier obtained a patent for an early version of the snowmobile. The company introduced the Ski-Doo in 1959 and it has since then become synonymous with snowmobiling.
In 2013, it went public, six years after entering the All-Terrain Vehicle (ATV) market, and three years later, it jumped on the side-by-side vehicle (SSV) movement. The rest is history.
Like many global businesses, the supply chain has slowed its ability to grow. In its latest quarter, sales declined by 5% to 1.59 billion CAD ($1.24 billion), while normalized earnings fell 31% to 1.48 CAD ($1.16) per share.
However, make no mistake about it, BRP’s business functions at the top of its game. For all of fiscal 2022, it expects sales and normalized earnings to grow by 27.5% and 74% year-over-year, respectively, at the midpoint of its guidance.
In March, BRP announced that it would invest 300 million CAD ($234.2 million) over the next five years to electrify its various product lines. Once it can build quieter, greener vehicles, sales will accelerate at a significant pace.
BRP is probably one of the most fun investments you’ll ever own.
Callaway Golf (ELY)
The second of three stocks that doesn’t focus on winter. Golfing is another activity that Americans like to do while visiting warmer climates during the winter.
According to Jefferies Financial Group (NYSE:JEF), Callaway is one of its five “Franchise Picks” for 2022. I think they’re right on the money with this one.
One only needs to consider the viewership at the recent PNC Championship, a father and son tournament that pairs a PGA Tour or PGA Champions pro with their sons. Tiger Woods was back with his son Charlie. As a result, it was the tournament’s best viewership — 2.3 million on NBC and Peacock — in more than 20 years.
It’s fair to say that Tiger Woods and his son were big draws. However, golf has become very popular with younger people over the past two years. Like boating and Brunswick, I see Callaway continuing to benefit from a desire to be outdoors.
ELY stock is up 184% since the March 2020 correction, which roughly coincides with the start of the pandemic in the U.S.
Stocks to Buy: Canada Goose (GOOS)
The maker of outdoor wear and other winter-focused apparel and footwear could do no wrong for a couple of years after going public in March 2017 through the end of 2018. And then the wheels fell off. Its share price dropped to as low as $15 in March 2020, from a November 2018 high above $70.
The pandemic, China, its use of coyote fur and goose down feathers, the list of things acting as headwinds to its share price is extensive.
However, its three-pronged approach to sales: online, in-store, and wholesale made it a retail brand to own despite its difficulties. And while my pick of GOOS for Best Stock of 2019 was spectacularly wrong, it’s great to see that it’s up 28% year to date (YTD) in December and seems to be getting its mojo back.
In November, Canada Goose reported a 40.3% increase in revenue — its e-commerce sales grew 33.8% year-over-year (YOY), and its China stores saw an 85.9% increase over the same period last year — and gross margins increased 960 basis points in the second quarter.
In terms of valuation, it’s a much better buy than it was two years ago, plus it now has PETA on its side. That’s bigger than you might realize.
Columbia Sportswear (COLM)
Columbia made the winter jacket I had until my wife bought me a Canada Goose parka a few years ago. They both seemed to keep me warm.
The Oregon-based, family-controlled manufacturer of outdoor and lifestyle apparel, footwear, equipment, and accessories, has long been a favorite stock of mine despite the fact it often seems like it’s underperforming.
In February 2014, I recommended its stock, stating the following about its business:
“I like COLM stock because it seems to be able to deliver profits even when sales are in decline, regardless of the economic climate. That’s rare among leisure stocks. The momentum it gained in 2013 should continue in 2014,” I wrote in 2014.
It’s up about 150% since. That’s the good news. The bad news is that the S&P 500 is up a similar amount over the same period.
Columbia ought to be at the top of your list if you want a stock to buy that will deliver in good times and bad and aren’t looking for a home run.
Stocks to Buy: Dick’s Sporting Goods (DKS)
There are so many good things to say about America’s largest sporting goods retailer — 734 locations across the U.S. — that it’s hard to know where to begin.
From strictly a performance perspective, its 55.6% annualized total return over the past three years isn’t too shabby. However, the fact it continues to scale back gun sales at its stores is a courageous move. And, of course, it doesn’t hurt that the sporting goods industry is one of the most stable anywhere.
According to the company’s November 2021 presentation, the U.S. sporting goods industry — estimated to be $120 billion annually — grew by 3.6% per year between 2014 and 2019.
Despite the strength of its business, it holds just a 7% market share, providing the company with an excellent opportunity to grow that into the teens. To do that, it’s building an e-commerce business that’s built to last combined with continual testing of new store concepts to engage athletes and active people across the country.
Winter and summer, it will continue to grow the top and bottom-line.
Electronic Arts (EA)
In the final of three non-winter stocks, I picked EA because it helps people have fun when they want to stay out of the cold. I guess that counts.
In early November, the company announced the strongest second quarter in its history. Net bookings for the trailing 12 months jumped 27% to $7.08 billion. However, it’s important to remember that gaming companies deliver sporadic results with the ups and downs timed around new releases.
In the second quarter, it had net revenue, net bookings, and earnings per share higher than its guidance. As a result, it raised its outlook for 2022 for the second time in its fiscal year.
“We had a strong beat this quarter, primarily driven by our live services, led by Apex Legends and FIFA Ultimate Team,” stated chief financial officer Blake Jorgenson in its November conference call.
We closed our acquisition of Playdemic at the end of the quarter, adding both a highly profitable mobile title and a blueprint for new sports titles in our broad portfolio. We delivered net revenue of $1.83 billion and net bookings of $1.85 billion.
As the company stated in its quarterly press release and conference call, the business has rarely been better.
Yet, good news aside, this past year hasn’t been good for shareholders. EA stock saw some massive dips in March, September, and at the start of December. However, if you’re patient and buy on the dips such as 2021, you will most certainly make money in the long run on EA.
Stocks to Buy: VF (VFC)
Like Electronic Arts, VF is not having a good year in the markets. As a result, as of Dec. 23, its shares are down more than 18% YTD. That’s despite making a $2.1 billion acquisition of Supreme, a global streetwear brand, in late 2020. The brand’s expected to add more than $600 million in revenue in 2022.
Between Supreme, The North Face, Timberland, Vans, Dickies, and several other smaller brands, the company expects to generate $12 billion in total revenue in 2022, 30% higher than in 2021. On the bottom line, it expects adjusted earnings per share of $3.25, with Supreme contributing 25 cents of profitability to the mix.
CEO Steve Rendle boasted in the company’s Q2 2022 press release:
As we move through the halfway point of our fiscal year, I remain encouraged by the underlying momentum across the portfolio, and the broad-based nature of this strength gives me confidence that we are driving the right strategy to accelerate growth in the quarters ahead
Its top four brands are all delivering solid results. Add Supreme to the mix, and you’ve got a powerful group of brands to grow sales.
Not to mention its valuation is cheaper than it’s been since 2018.
Vail Resorts (MTN)
While the world’s leading operator of ski resorts might be trailing the markets in 2021, it’s got a long-term track record that’s second to none. Over the past 10 years, its annualized total return is 23.4%, 720 basis points higher than the entire U.S. market.
It makes money in three ways: It Operates world-class ski resorts such as Vail in the U.S. and Whistler Blackcomb in Canada, provides lodging at those resorts, and develops resort real estate in and around its mountain properties.
So, whenever it makes an acquisition, it goes to work maximizing the revenues in each of those areas, adding significant value for shareholders.
Speaking of acquisitions, in early December, it announced it would buy three ski areas for $125 million from Seven Springs Mountain Resort Inc. The three ski areas are located an hour’s drive from Pittsburgh. The amenities include 495 skiable acres, a 418-room hotel, and a full-service spa.
Like it always does, Vail Resorts will take the best parts of each of these ski areas and figure out how to make more money from them without hurting their unique characteristics.
It’s not nearly as easy as it sounds.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.