The US Supreme Court, on February 20, struck down Donald Trump’s sweeping tariffs in a 6-3 decision authored by conservative Chief Justice John Roberts. In response, Trump lashed out at the justices who voted against him and announced a 10% global tariff, under a different legal authority, “over and above our normal tariffs already being charged.”
The market had mixed reactions to this decision, with some thinking that this landmark ruling would provide relief to the industries most heavily affected by the tariffs. Chris Beauchamp, Chief Market Analyst at IG Group, had this to say:
”You’re looking at, obviously, a whole host of industrial stocks, importers, consumer discretionary that’s going to be importing plenty of stuff from overseas. And that could mean that they will have some relief to bring down prices if and when—as I say, it’s an unclear situation—if and when the tariffs are firmly unwound and the order comes through.”
Rob Burdett from Nedgroup Investments had similar thoughts:
”For equities, the ruling against the tariffs is widely expected to lift US and global equities. Relief from trade uncertainty may act as a tailwind for cyclicals and import‑dependent sectors such as IT hardware (including semiconductors, although they will most likely be included in sectoral tariffs) retail and industrials.”
Despite the potential benefits, some analysts are worried that the lack of clarity on key questions could create a significant overhang on markets. One of those questions is on the eligibility for tariff refunds, as mentioned by Eric Merlis, co-head of global markets at Citizens:
”The Supreme Court’s 6–3 ruling against the Trump administration on tariffs sparked an immediate knee jerk rally in the euro. However, the decision stopped short of clarifying eligibility for tariff refunds, leaving a key source of uncertainty intact.”
Phil Blancato, Chief Market Strategist at Osaic, echoed these sentiments regarding refunds:
”Lastly, the question of who has paid for the tariffs, U.S. companies, consumers, or foreign exporters, will come to the forefront on who deserves the repayment from the government.”
Another key question is how the Trump administration would replace the tariff revenue, as mentioned by Tom Graff, Chief Investment Officer at Facet:
”Longer-term, there will be two big questions: How does the government replace the tariff revenue? Without it, the deficit will be much higher than current, and this could create significant pressure on Treasury yields.”
Given the potential short-term uplift for consumer companies, let us now take a look at the 14 best consumer discretionary stocks to buy right now.
Our Methodology
We filtered consumer discretionary stocks in the US market with a market capitalization of at least $2 billion, at least 3 analysts covering them, and a median projected upside of at least 5%. We then filtered the list to only contain stocks with at least 15 hedge fund holders, according to Insider Monkey’s proprietary hedge fund database, which tracks 978 hedge funds as of Q3 2025. Finally, we selected the 14 stocks with the most hedge fund holders. When two or more stocks were tied among hedge fund holders, we used the median analyst-provided projected upside as the tiebreaker.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Note: All data presented are as of 20 February 2026, market close.
14. Etsy Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 46
Etsy Inc. (NASDAQ:ETSY) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Truist, on February 20, raised its target price on Etsy by 3.8% to $83 (from $80) and retained its Buy recommendation. The firm thinks that Etsy, following the release of the company’s Q4 2025 results and Q1 2026 guidance, is making solid progress towards positive gross merchandise sales (GMS) growth through improvements in search, AI-powered recommendations, marketing efficiency, and greater focus on app usage.
Etsy released its Q4 2025 results on February 19, which were headlined by an acceleration in revenue growth to 6.6% YoY (from 0.9% YoY in Q3). Revenue growth was driven primarily by a recovery in GMS growth, combined with an improvement in the company’s take rate.
Comparable GMS (excludes prior year figures from Reverb, which Etsy divested from last April 2025) grew 2.4% YoY to $3.6 billion (vs. 0.9% YoY in Q3). The mobile app played a large role in this improvement, with mobile app GMS growing 6.6% YoY (vs. 5.0% YoY in Q3). The US market was another point of interest, posting positive growth for the first time since Q4 2021.
Etsy’s take rate expanded 170 basis points YoY to 24.5% (from 22.8%). The divestiture of Reverb accounted for approximately half of this improvement. Ad revenue and other ancillary revenue contributed the rest.
Etsy Inc. (NASDAQ:ETSY) operates an online marketplace for handmade products, like shoes, clothes, bags, and accessories. The company is based in New York, New York, and was founded in 2005.
13. Rollins Inc. (NYSE:ROL)
Number of Hedge Fund Holders: 48
Rollins Inc. (NYSE:ROL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Morgan Stanley, on February 14, trimmed its target price on Rollins by 2.9% to $70 (from $72), but kept its Overweight call. This change in target comes a couple of days after Rollins released its Q4 2025 earnings, on February 11, which showed organic revenue growth of 5.7%, missing expectations, due to poor weather in the quarter.
In the same report, Rollins’s management provided both its short-term and medium-term financial outlook. For revenue, they expect 9% to 11% YoY growth in 2026 (vs. a 12% average over the last three years), broken down as follows: 7% to 8% YoY organic growth and 2% to 3% YoY M&A growth. In the medium-term, management is aiming for above-market organic growth, supplemented by M&A growth.
As for profitability, management is aiming to improve its EBITDA margin by 2 to 7 percentage points, bringing margins to 25% to 30% by the end of 2026 (vs. an average of 23% over the past three years). The target becomes even more aggressive in the medium term, with management aiming for EBITDA margins of 30% to 35%.
Rollins Inc. (NYSE:ROL) is an international service company that provides pest and termite control services to residential and commercial customers. The company is based in Atlanta, Georgia, and was founded in 1948 by John W. Rollins Jr. and O. Wayne Rollins Sr.
