Back to top

Image: Bigstock

5 Consumer Stocks That Gained More Than 50% in 2017

Read MoreHide Full Article

With nearly a fortnight left to ring in a New Year, we note that 2017 has been quite a delight for investors. The market depicted a solid bull run this year, steered by a rebounding U.S. economy that has been riding on an improved labor market, higher consumer spending, increased business investments and favorable government spending.

This is quite evident from the latest GDP data which suggests that the U.S. economy improved at a better-than-expected rate in the third quarter. Per the Bureau of Economic Analysis, the second estimate for third-quarter GDP jumped at an annual rate of 3.3%, marking the fastest pace over the past three years. The underlying strength in the economy paved the way for a rate hike for the third time this year.

These factors, which have driven major indices, also give out positive signals for 2018. Evidently, the S&P 500, Nasdaq and Dow Jones have rallied 19.1%, 15.2% and 24.3%, respectively, so far this year.

Consumer Stocks a Safe Haven: Here’s Why

While the economic expansion has been quite broad-based, consumer stocks seem to be major gainers. Despite facing disruptions from hurricanes, these stocks have been gaining from improved labor market and bolstered consumer confidence. Per the Conference Board data, the Consumer Confidence Index surged to 129.5 in November, the highest in about 17 years. Moreover, consumer spending, which accounts for over two-thirds of the U.S. economic activity, remained healthy in the third quarter.

Thus, consumer-driven companies appear well placed, courtesy of these factors. Also, these companies have been gaining from solid focus on enhancing portfolio through innovation, product launches and strategic buyouts. Stringent cost-cutting measures and efforts to keep pace with consumers preference to online shopping has also been aiding some of these stocks.

All said, we have handpicked some top-ranked consumer stocks that not only performed exceptionally well this year but are also likely to remain on the growth trajectory in 2018. With their sturdy fundamentals, strong past record and encouraging outlook, these stocks have soared more than 50% this year, giving enough reasons for investors to take a look at them.

Moreover, their large market cap (greater than $1 billion) makes them an ideal investment option. Notably, large-cap stocks offer stability, healthy dividends as well as safety.

5 Consumer Stocks You Can’t Miss

Wynn Resorts, Ltd. (WYNN - Free Report) , which has delivered top and bottom-line surprises for three consecutive quarters now is a solid bet. The Zacks Rank #1 company’s strong brand recognition, efforts to boost traffic and improved non-gaming revenues bode well. Also, its Wynn palace resort is poised to witness increased visits from tourists and leisure gamblers over the long term.

Boasting a market cap of roughly $17 billion, this casino resorts owner has rallied 94% till date, faring better than the industry’s 45.4% surge. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)

Sporting a Zacks Rank #1 (Strong Buy), Skechers U.S.A., Inc. SKX is another valuable option. The company, with a market cap of about $6.1 billion, has gained 54.5% year to date, surpassing the industry’s 28.2% upside. We note that emphasis on new line of products, cost-containment efforts, inventory management and global distribution platform remain Skechers’ growth drivers.

Also, this renowned footwear marketer and distributor has surpassed revenue estimates for fourth straight quarters now, gaining from solid international wholesale business and company-owned global retail operations. Management now expects both the top and bottom lines to increase year over year during the final quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Another big-wig with an impressive past record is The Estée Lauder Companies Inc. EL. This Zacks Rank #2 (Buy) company has surged 71.6% this year, crushing the industry’s growth of 25.9%. The cosmetics biggie has been gaining from its solid focus on buyouts and product launches; strength in emerging markets and robust online business.

Driven by these efforts, Estee Lauder marked its 13th and 3rd straight earnings and sales beat, respectively, in first-quarter fiscal 2018. Management expects to witness continued growth opportunities in the global prestige beauty industry, which encouraged it to raise its outlook for fiscal 2018. Notably, the company with a market cap of nearly $47.6 billion has a long-term growth rate of 12.5%.

Investing in Ollie's Bargain Outlet Holdings, Inc. OLLI, which carries a Zacks Rank #2, can also prove to be a prudent choice. This provider of brand name merchandise has gained 84.6% this year, as against the industry’s 1.7% dip. The company, with a market cap of more than $3 billion flaunts a spectacular earnings surprise record.

Ollie's Bargain has been gaining from its focus on expanding store base, enhancing assortments and customer loyalty program. Encouraged by these factors and its year-to-date performance, management also raised its fiscal 2017 earnings and sales outlook, with its third-quarter earnings release.

Investors can also count upon World Wrestling Entertainment, Inc. WWE, which has a market cap of approximately $2.5 billion. This media and entertainment company’s focus on increasing original content production, localization, subscriber growth, rise in TV rights fees and strategic initiatives have helped the stock to outperform the industry year-to-date.

Evidently, this Zacks Rank #2 stock has returned a substantial 82.6% this year, cruising ahead of the industry’s 27.1% rise. Further, management is optimistic about achieving another great year of revenues and adjusted OIBDA growth. World Wrestling Entertainment has out done the Zacks Consensus Estimate for revenues and earnings in the past four and two quarters, respectively.

Given the buoyant markets and favorable economic indicators, we believe that investing in these stocks is likely to rake in great returns in 2018.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>

In-Depth Zacks Research for the Tickers Above

Choose a ticker to receive a FREE report - normally $25 each:

Wynn Resorts, Limited (WYNN) - free report >>

Published in