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4 Consumer Discretionary Picks to Tap Rising Coronavirus Fears

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The United States is once again reeling under fears of coronavirus, with new cases on the rise. November particularly has proven to be one of the worst months since the outbreak with almost a quarter of all U.S. cases since the beginning of this pandemic being reported in the month.

Although positive news on the vaccine front came last week, there is still no concrete assurance on when a vaccine will be available in the markets. Hence, fears of coronavirus flaring up further may not be unwarranted. Although some European countries are going under lockdown again on fears of the virus spreading at an alarming rate, it is unlikely that the United States will take similar steps at a time when the economy is trying to get back on its feet. It thus won’t come as a surprise if people once again start getting confined to their homes and start stockpiling on essential goods.

Coronavirus Cases on the Rise

According to Worldometer, as of Nov 22, total coronavirus cases in the United States surpassed 12.5 million. This includes more than 262,000 deaths. The country has a population of around 331 million, which means that around 3.8% of the people have so far been infected by the virus. However, the numbers could be higher because there may be people who have had the virus but were not tested.

Of the total number of cases, Texas accounts for around 9.5% of the infections, while California is a close second with 1,116,056 people having tested positive for the virus.

November so far has been one of the worst months since the outbreak. Although the rate of infections had somewhat come down over the past couple of months, it once again flared up in November. According to data from Johns Hopkins University, the United States reported more than 3 million cases between Nov 1 and Nov 22, which is almost a quarter of the total cases reported since the outbreak. This has raised fears once again that the virus may flare up during the winters.

Pandemic Changing Lifestyle

The pandemic has left global trade badly battered with the travel, tourism and hospitality businesses completely shattered. Besides, lockdowns by different governments following the outbreak of the coronavirus is still taking a toll on import and export.

Needless to say, the pandemic has completely changed our lives, with things like work and learn from home becoming the new normal. Also, people have started depending more on technology, be it ordering food, groceries and other essentials or running businesses.

Some sectors, especially shelter-in-place stocks, have particularly been benefiting from the situation as more people are becoming technology dependent.

The consumer discretionary sector especially has been one of the biggest beneficiaries of this pandemic. The Consumer Discretionary Select Sector SPDR’s (XLY) has returned 28.2% in the same time frame.

Our Choices

Given that fears have once again started growing in the minds of people and they may consider staying at home and start stockpiling on essential goods again, it would be prudent to invest in these consumer discretionary stocks.

Central Garden Pet Company (CENT - Free Report) is looking forward to strengthening its position as one of the leading companies in the U.S. pet supplies and lawn and garden supplies space.

The company’s expected earnings growth rate for the current year is 23.1%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days. Central Garden Pet Company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lifetime Brands, Inc. (LCUT - Free Report)  is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories, marketing its products under various trade names.

The company’s expected earnings growth rate for the current year is 93.3%. The Zacks Consensus Estimate for current-year earnings has improved 26.2% over the past 60 days. Lifetime Brands carries a Zacks Rank #2.

Reynolds Consumer Products Inc. (REYN - Free Report) is a consumer branded and private label products company. It produces and sells branded and store-brand products which include cooking products, waste & storage products and tableware. 

The company’s expected earnings growth rate for the current year is 36.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. Reynolds Consumer Products holds a Zacks Rank #2.

Spectrum Brands Holdings Inc. (SPB - Free Report) offers a portfolio of leading brands in several product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, and lawn, garden and home pest control products and repellents.

The company’s expected earnings growth rate for the current year is 21%. The Zacks Consensus Estimate for current-year earnings has improved 17.8% over the past 60 days. Spectrum Brands has a Zacks Rank #2.

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