Believe it or not, the stock market appears to not be on the brink of implosion. This pleasantly surprising reality therefore draws attention to certain stocks to buy this week. Whether it’s because a public firm received a rating upgrade or economic dynamics tilted favorably, some public companies are benefitting from the pivot.
To be fair, prospective investors will want to run a tight ship. While the benchmark SPDR S&P 500 ETF Trust (NYSEARCA:SPY) gained nearly 13% over the trailing month, the fund is still down double digits for the year.
Anything can still happen in this market so approach the stocks to buy this week carefully.
|AOUT||American Outdoor Brands||$9.07|
American Outdoor Brands (AOUT)
Heading into the weekend, shares of American Outdoor Brands (NASDAQ:AOUT) gave stakeholders a reason to smile, shooting up 3%. Over the trailing week, however, American Outdoor has been much more impressive, gaining a hearty 18%. Fundamentally, the company appears to benefit from shifting consumer behaviors.
In short, the “revenge travel” component of the consumer economy remains strong. And that’s really no surprise. After a two-year period of pandemic-related lockdowns and mitigation measures, people want to actualize the experiences they missed out on. With American Outdoor specializing in products geared for its namesake endeavor, investors are looking into AOUT.
To be fair, American Outdoor reported waning sales and an earnings per share loss in its fiscal fourth quarter. However, traders could be speculating that as inflation crimps household savings, people will prefer cheaper vacation experiences, such as camping. Therefore, it’s worth putting AOUT on your radar for stocks to buy this week, especially because of its momentum.
Robert Half (RHI)
From a year-to-date perspective, employment placement services firm Robert Half (NYSE:RHI) appears disappointing, shedding nearly 25% of market value. However, RHI stock had a solid day on Friday, popping up 1.4% heading into the weekend. Also, for the trailing week, the company gained over 4% of market value.
So, why the sudden pivot to the upside? It’s the “R” word called regret. Several months ago, many worker bees participated in the other “R” word called resignation. However, a recent CNBC report suggested that more than a quarter of workers regret participating in the so-called Great Resignation.
“Employees were feeling drunk with power,” said James Bailey, a professor of leadership development at George Washington University School of Business. “Now, they’ve sobered up.”
Did they ever. You can talk all you want about the robust July jobs report. The technology sector still is laying off people, meaning that RHI is one of the relevant stocks to buy this week.
Department store giant Nordstrom (NYSE:JWN) represents a nuanced hedge against the thesis above for Robert Half. One particular component of the company’s business – the discount brand called Nordstrom Rack – may enjoy higher demand. How come? With so many people in high-paying jobs getting the boot, people will have to upgrade their wardrobe.
Further, the upgrading won’t likely be for just the interviews. Should companies hire new workers, I’m not too sure they will immediately grant them work-from-home privileges. Admittedly, this is a cynical argument for JWN. But it might work, making it one of the stocks to buy this week.
If I may somewhat contradict myself, the robust jobs report – while it may not have helped the tech sector – suggests that the consumer discretionary economy may not be as bad as we previously thought. Therefore, JWN could enjoy organic demand. Over the past week, Nordstrom gained nearly 3% of market value.
Warby Parker (WRBY)
Layoffs are crummy. However, getting rid of human overhead may help Warby Parker (NYSE:WRBY) in the long run. Focusing on affordable eyewear, Warby Parker has seen better days. Since the start of this year, shares have plunged more than 62%.
Early last week, CNN reported that Warby – which pioneered the direct-to-consumer model for stylish eyewear under $100 – announced job cuts. Management cited an uncertain economic environment. The company will eliminate 63 corporate positions, translating to 2% of its total employees.
However, stakeholders appreciated the news. Over the trailing week, WRBY has gained more than 36%. In the trailing month, shares are on the cusp of returning 49%.
Along with the implied reduced cost structures, Warby Parker benefits from a relevant underlying business. By 2050, experts predict that nearly half of the world will suffer from myopia. Again, it’s cynical, but it makes for an interesting name among stocks to buy this week.
Blue Apron (APRN)
Just mentioning the name Blue Apron (NYSE:APRN) might turn off some folks and I get it. A long-embattled public company, Blue Apron specializes in meal-kit deliveries. While the concept was initially intriguing, the problem stemmed from viability concerns. Among its many challenges, the company continued to post consecutive and often rising net losses. Without a clear path to profitability, APRN sunk.
Blue Apron shares are down almost 44% YTD. Since its first public closing price in June 2017, APRN hemorrhaged 97% of market value. Nevertheless, the security skyrocketed about 25% during the trailing week. What’s going on here?
Turns out, Lake Street Capital initiated coverage on APRN with a “buy” rating along with a $9 price target. This forecast represents a 136% lift. Lake Street isn’t the only bull in town, with Canaccord Genuity also setting a “buy” rating.
Possibly, analysts feel optimistic about the resilience of the consumer economy and labor force. Therefore, keep APRN on your radar for stocks to buy this week.
Marketed as a provider of high-performance lithium products and solutions, Livent (NASDAQ:LTHM) has long been a relevant name. With powerful political initiatives such as the Inflation Reduction Act – which earmarks billions for climate-change solutions – LTHM could swing higher. After all, electric vehicles foster zero-emissions transportation (at least on the roadways). However, they depend on lithium to do their thing.
Sure enough, Livent represents one of the few non-hydrocarbon-related public firms to print green for the year. Shares are up nearly 17% YTD. However, recent momentum contributed substantially to this status. In the trailing week, LTHM shot up 14% while in the trailing month, the stock gained nearly 50%.
Likely, China provided the fundamental catalyst. With the No. 2 economy in the world loosening certain Covid-related restrictions, China’s ravenous appetite for lithium might rise. Per a 2017 article from the New York Times, Beijing has long targeted EVs. Therefore, a swing higher for LTHM simply follows natural cadences. This is one of the stocks to buy this week for momentum traders.
MGM Resorts (MGM)
The bullish argument for MGM Resorts (NYSE:MGM) ties in with what you may call the Robert De Niro effect. In the final voiceover scenes for the film Casino, De Niro’s character bemoaned that the big corporations took over Las Vegas. Now, instead of gamblers, you see pensioners and families with children dominating traffic on the Strip.
Put another way, Americans generally enjoy the experience of gambling rather than the gambling act itself. Therefore, public gaming firms – at least with their Las Vegas units – tend to feature non-gambling revenue making up the majority of total sales. However, it’s different in Macau.
Indeed, in Macau – the special autonomous region of China – people go there to gamble. Casino-related revenues dominate the picture for total operations. Therefore, many Vegas icons (including MGM) have pivoted to Asia.
Of course, with China’s crackdown on Covid-19 detrimentally impacting Macau, casino firms have suffered. However, in the long run, this headwind represents a temporary inconvenience. Therefore, contrarians may consider MGM as one of the stocks to buy this week.
On the date of publication, Josh Enomoto 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.