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4 Consumer Discretionary Stocks Rallying Despite Coronavirus Woes

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After commencing the year on a bright note, Wall Street has a good run right up to the middle of February before losing track completely on account of the coronavirus pandemic, which was first detected in China.

This outbreak compelled several developed nations, including the United States, and major emerging economies to resort to either full or partial lockdown to curb the spread of the deadly virus.

Consequently, the United States and the global economy were left rattled within a few weeks. Wall Street ended its historic 11-year long bull run. Notably, the three major stock indexes had entered the bear territory in just 16-19 days. Although the Dow is currently out of the bear market territory, the S&P 500 and the Nasdaq Composite are yet to come out.

Meanwhile, surprising many industry experts, a handful of consumer discretionary stocks have surged in the past four weeks. Some of them carry a favorable Zacks Rank and strong growth potential.

Importance of Surging Consumer Discretionary Stocks

The consumer discretionary sector comprises businesses that sell goods and services, which are considered non-essential by consumers. These are the products that consumers can avoid without any major consequences to their well-being. In fact, these goods are desirable if and only if the available income of an individual is sufficient to purchase them. This is in sharp contrast to consumer staples products that are absolutely necessary.

The Consumer Discretionary Sector comprises apparel, toys/hobby, hand-held tools, household appliances and leisure products in the manufacturing segment and in services segment includes gaming, radio/TV/cable/other media products and broadcast services.

Consequently, consumer discretionary products witness strong demand during the recovery and booming phase of a business cycle. Therefore, stock price of most of these companies are likely to increase during this period. Meanwhile, stock price of consumer discretionary companies are likely to fall during sharp downturn of the stock market.

As a result, when the stock price of any consumer discretionary company rallies despite severe market mayhem, it generally indicates established business model, strong future prospects and solid financial strength.


Our Top Picks

We have narrowed down our search to four consumer discretionary stocks that have surged in the past four weeks when the coronavirus-induced panic devastated Wall Street. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our four picks in the past four weeks.


Vista Outdoor Inc. (VSTO - Free Report) designs, manufactures and markets consumer products for outdoor sports and recreation markets in the United States and internationally. It operates in two segments: Shooting Sports and Outdoor Products. The Zacks Rank #1 company has an expected earnings growth rate of 88.3% for the current year (ending March 2021). The stock price has rallied 31.2% year to date.

LiveXLive Media Inc. LIVX a digital media company, engaged in the acquisition, distribution and monetization of live music, Internet radio and music-related streaming and video content. The Zacks Rank #2 company has an expected earnings growth rate of 12.7% for the current year (ending March 2021). The stock price has jumped 15.3% year to date.

Genasys Inc. GNSS designs, develops, and commercializes directed and multidirectional sound technologies in the Americas, Europe, the Middle East, Africa and the Asia Pacific. It offers voice broadcast products and location-based mass messaging solutions for emergency warning and workforce management. The Zacks Rank #1 company has an expected earnings growth rate of 62.5% for the current year (ending September 2021). The stock price has advanced 11% year to date.

Gaia Inc. GAIA operates a digital video subscription service and online community for underserved member base worldwide. It has a digital content library of approximately 8,000 titles in English, Spanish, German and French languages available to its subscribers on Internet-connected devices. The Zacks Rank #1 company has an expected earnings growth rate of 59.6% for the current year. The stock price has gained 7.2% year to date.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Go Deeper With Exclusive Zacks Research

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Vista Outdoor Inc. (VSTO) - free report >>