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Inflation Stabilizes on Easing Oil Prices: 5 Discretionary Stocks to Buy
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Key Takeaways
AOUT, CROX, ROKU, LCUT and TILE are five discretionary stocks with upside.
AOUT's earnings growth is expected to top 100%, with estimates up 29.4% in 60 days.
LCUT's earnings estimate has improved 90.4% over 90 days, with 71.6% growth expected.
Inflation is finally showing signs of stabilizing, as consumer prices increased marginally in July. Oil prices fell for the second straight month, much to the relief of consumers, who have been concerned about the economy’s health.
Although inflation remains high, signs of slowing will give consumers the much-needed confidence. The marginal rise also weakens investors’ expectations of a rate hike by the Federal Reserve next month.
In July, the consumer price index (CPI), one of the Federal Reserve’s key indicators of inflation, rose 0.1% sequentially, which came in line with analysts’ expectations, the Bureau of Labor Statistics reported on Wednesday. Core CPI, which strips out the volatile food and energy prices, rose 0.2% in July.
Year over year, CPI declined to 3.4% in July from 3.5% in the month earlier. Core CPI came in at 2.5% year over year last month, down 0.1% from June. Energy prices fell 1.5% after declining 5.7% in the prior month. Food and shelter costs each rose 0.1%.
The inflation data comes days after data showed surprise job losses in July. Inflation rose sharply earlier in the year owing to the U.S.-Iran conflict that saw oil prices surging 10.9% in March.
However, a temporary ceasefire and optimism surrounding peace talks between the two warring nations have seen energy costs ease over the past two months. The Federal Reserve had been planning to hike interest rates by a quarter percentage point this year to fight inflation.
Although inflation remains above the Fed’s 2% target, signs of easing inflation and an unexpectedly large number of job losses could make the central bank wait for some more time before deciding on a rate cut.
Lower borrowing costs will give consumers more spending power, which is expected to help the broader economy.
5 Consumer Discretionary Stocks With Upside
American Outdoor Brands
American Outdoor Brands, Inc. is a provider of outdoor products and accessories, including hunting, fishing, camping, shooting and personal security and defense products, for rugged outdoor enthusiasts. AOUT produces products under the brands Caldwell, Crimson Trace, Wheeler, Tipton, Frankford Arsenal, Lockdown, BOG, Hooyman, Smith & Wesson Accessories, M&P Accessories, Thompson/Center Arms Accessories, Performance Center Accessories, Schrade, Old Timer, Uncle Henry, Imperial, BUBBA, UST, LaserLyte and MEAT!.
American Outdoor Brands’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 29.4% over the past 60 days. AOUT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs
Crocs, Inc. is one of the leading footwear brands with a focus on comfort and style. CROX offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages.
Crocs’ expected earnings growth rate for the current year is 10.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. CROX currently carries a Zacks Rank #2.
Roku, Inc.
Roku, Inc. is the leading TV streaming platform provider in the United States, Canada and Mexico based on hours streamed.
Zacks Rank #1. Roku’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 13.6% over the past 60 days.
Lifetime Brands
Lifetime Brands, Inc. is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantry ware & spices, tabletop and bath accessories. LCUT markets its products under various trade names, including Farberware, KitchenAid, Pfaltzgraff, Cuisinart, Hoffritz, Sabatier, Nautica, DBK-Daniel Boulud Kitchen, Joseph Abboud Environments, Roshco, Baker's Advantage, Kamenstein, CasaModa, Kathy Ireland, and USE.
Lifetime Brands’ expected earnings growth rate for the current year is 71.6%. The Zacks Consensus Estimate for current-year earnings has improved 90.4% over the past 90 days. Currently, LCUT carries a Zacks Rank #1.
Interface
Interface, Inc. is the world's largest manufacturer of modular carpet, which it markets under the Interface and FLOR brands. TILE is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment, while enhancing shareholder value.
Interface’s expected earnings growth rate for the current year is 21.7%. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the past 60 days. TILE sports a Zacks Rank #1 at present.
View the Zacks #1 Rank List
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Inflation Stabilizes on Easing Oil Prices: 5 Discretionary Stocks to Buy
Key Takeaways
Inflation is finally showing signs of stabilizing, as consumer prices increased marginally in July. Oil prices fell for the second straight month, much to the relief of consumers, who have been concerned about the economy’s health.
Although inflation remains high, signs of slowing will give consumers the much-needed confidence. The marginal rise also weakens investors’ expectations of a rate hike by the Federal Reserve next month.
Given this scenario, we recommend buying four consumer discretionary stocks, namely, American Outdoor Brands, Inc. (AOUT - Free Report) , Crocs, Inc. (CROX - Free Report) , Roku, Inc. (ROKU - Free Report) , Lifetime Brands, Inc. (LCUT - Free Report) and Interface, Inc.(TILE - Free Report) ,
July Data Shows Inflation Stabilizing Finally
In July, the consumer price index (CPI), one of the Federal Reserve’s key indicators of inflation, rose 0.1% sequentially, which came in line with analysts’ expectations, the Bureau of Labor Statistics reported on Wednesday. Core CPI, which strips out the volatile food and energy prices, rose 0.2% in July.
Year over year, CPI declined to 3.4% in July from 3.5% in the month earlier. Core CPI came in at 2.5% year over year last month, down 0.1% from June. Energy prices fell 1.5% after declining 5.7% in the prior month. Food and shelter costs each rose 0.1%.
The inflation data comes days after data showed surprise job losses in July. Inflation rose sharply earlier in the year owing to the U.S.-Iran conflict that saw oil prices surging 10.9% in March.
However, a temporary ceasefire and optimism surrounding peace talks between the two warring nations have seen energy costs ease over the past two months. The Federal Reserve had been planning to hike interest rates by a quarter percentage point this year to fight inflation.
Although inflation remains above the Fed’s 2% target, signs of easing inflation and an unexpectedly large number of job losses could make the central bank wait for some more time before deciding on a rate cut.
Lower borrowing costs will give consumers more spending power, which is expected to help the broader economy.
5 Consumer Discretionary Stocks With Upside
American Outdoor Brands
American Outdoor Brands, Inc. is a provider of outdoor products and accessories, including hunting, fishing, camping, shooting and personal security and defense products, for rugged outdoor enthusiasts. AOUT produces products under the brands Caldwell, Crimson Trace, Wheeler, Tipton, Frankford Arsenal, Lockdown, BOG, Hooyman, Smith & Wesson Accessories, M&P Accessories, Thompson/Center Arms Accessories, Performance Center Accessories, Schrade, Old Timer, Uncle Henry, Imperial, BUBBA, UST, LaserLyte and MEAT!.
American Outdoor Brands’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 29.4% over the past 60 days. AOUT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs
Crocs, Inc. is one of the leading footwear brands with a focus on comfort and style. CROX offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages.
Crocs’ expected earnings growth rate for the current year is 10.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. CROX currently carries a Zacks Rank #2.
Roku, Inc.
Roku, Inc. is the leading TV streaming platform provider in the United States, Canada and Mexico based on hours streamed.
Zacks Rank #1. Roku’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 13.6% over the past 60 days.
Lifetime Brands
Lifetime Brands, Inc. is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantry ware & spices, tabletop and bath accessories. LCUT markets its products under various trade names, including Farberware, KitchenAid, Pfaltzgraff, Cuisinart, Hoffritz, Sabatier, Nautica, DBK-Daniel Boulud Kitchen, Joseph Abboud Environments, Roshco, Baker's Advantage, Kamenstein, CasaModa, Kathy Ireland, and USE.
Lifetime Brands’ expected earnings growth rate for the current year is 71.6%. The Zacks Consensus Estimate for current-year earnings has improved 90.4% over the past 90 days. Currently, LCUT carries a Zacks Rank #1.
Interface
Interface, Inc. is the world's largest manufacturer of modular carpet, which it markets under the Interface and FLOR brands. TILE is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment, while enhancing shareholder value.
Interface’s expected earnings growth rate for the current year is 21.7%. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the past 60 days. TILE sports a Zacks Rank #1 at present.