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5 Stocks to Play as Leisure Spending Picks Up the Pace in June

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Rapid vaccination across the United States is constantly lending support to the economic rebound. Along with other cyclical sectors like industrial, financial and energy, consumer discretionary is poised to grow on the back of economic recovery and impressive performance.

As of May 30, the U.S. Centers for Disease Control and Prevention (CDC) reported that America administered 294,928,850 doses of COVID-19 vaccines and distributed 366,316,945 doses. The decline in cases helped the administration lift restrictions and businesses return to normalcy. In its latest public health guidelines, the group also stated that restrictions on wearing masks at both indoor and at public gatherings are relaxed. Per the new recommendation, those who got completely vaccinated do not need to wear masks or maintain social distancing at indoor or outdoor gatherings. In fact, those traveling domestically do not need to get tested before or after arrival or self-quarantine after travel.

Additionally, the decline in the unemployment rate in the past weeks has been boosting consumer confidence consistently. The Conference Board recently reported that its consumer sentiment index stands at 117.2 for May after being downwardly revised in April. This stable consumer confidence is also helping the leisure industry gear up for a post-pandemic resurgence. With restrictions being eased, Americans are venturing out and engaging in outdoor recreation.

According to a Deloitte survey report, all age- and income-groups are making plans to travel, capitalizing on the summer season. Going by the survey, 22% people confirmed that they planned to spend significantly higher than the pre-pandemic summer (especially more than that of 2019) levels. Those planning a vacation are looking to avoid the crowd and visit national and state parks with enhanced safety measures.

The pandemic also created low-key, close-to-home destinations for many who are unsure of traveling to high-density tourist spots both inside and outside their state or country. For instance, Yakima Valley emerged as one such getaway site. Leisure travelers are driving their RVs or taking the hop-on, hop-off shuttles to the spot, visiting the breweries and camping with their families. Hence, unchartered territories with sparse population could become tourist hotspots, which in turn, will help sustain tourism. Journeys along scenic routes and to national sanctuaries are likely to increase and due to lack of hotels and facilities, sales of RVs and campers are also poised to grow.

5 Top Choices

Given the current scenario, hotels, cruise lines and other leisure services that have been hard hit by COVID-19 over the past year, could be the first to bounce back. More and more Americans are willing to spend on travel and leisure as lockdowns and travel restrictions are gradually relaxed. Here are five such leisure stocks that promise healthy returns on investment.

RCI Hospitality Holdings, Inc. (RICK - Free Report) engages in hospitality and related businesses. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Leisure and Recreation Services industry’s projected earnings growth rate of 34.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 58.1% upward over the past 60 days. RCI Hospitality currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Pool Corporation (POOL - Free Report) distributes swimming pool supplies, equipment and related leisure products. This presently Zacks #1 Ranked company's expected earnings growth rate for the current year is 38.3% compared with the Zacks Leisure and Recreation Products industry’s projected earnings growth of 28.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 22.8% upward over the past 60 days.

SeaWorld Entertainment, Inc. (SEAS - Free Report) operates as a theme park and entertainment company. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Leisure and Recreation Services industry’s projected earnings growth of 34.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised more than 100% upward over the past 60 days. SeaWorld holds a Zacks Rank #2 (Buy) at present.

MasterCraft Boat Holdings, Inc. (MCFT - Free Report) designs, manufactures and markets recreational powerboats. This currently Zacks #2 Ranked company's expected earnings growth rate for the ongoing year is above 100% compared with the Zacks Leisure and Recreation Products industry’s projected earnings growth of 28.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 14.7% upward over the past 60 days.

Brunswick Corporation (BC - Free Report) designs, manufactures and markets recreation products. This presently #2 Ranked player's expected earnings growth rate for the current year is 45.4% compared with the Zacks Leisure and Recreation Products industry’s projected earnings growth rate of 28.7%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 15.5% upward over the past 60 days.

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