There are potentially a few ways to profit from trends within the consumer sector. Investing in fitness and healthy living is certainly one of them. Additionally, I continue to find appeal in the recreational vehicle market, a sector detailed in one of my initial blogs back in November. The long-term prospects for such industries is apparent, as products gain acceptance over time and demographics improve. Add the following stocks to your Watchlist or portfolio if you think these trends will endure.
A solid earnings report catapulted the shares of this supermarket, which can be categorized with the likes of Whole Foods and recent IPO Fairway Group Holdings.
The company is looking to capitalize on favorable store traffic through the expansion of its store base. Its aggressive plans to add units should be a secondary factor contributing to share-profit gains, along with comparable-store sales increases.
Management is intent on meeting both of these goals without sacrificing operating margin. It plans to shell out about $140 million in capital expenditures this year and has lowered its long-term debt well below last year’s balance.
Interest in the stock has likely been generated by its position as a non-cyclical food-related entity, while it also implements a growth strategy. Room for industry expansion remains significant, with The Fresh Market Inc (NASDAQ:TFM) as a probable prime candidate to seize the opportunity. Barring the pitfalls of a company like this, including cost overruns, the outlook is bright. The shares would make a good addition to near- or long-term portfolios.
Brunswick Corporation (NYSE:BC) has redirected resources to growth segments effectively, supporting its positive earnings outlook and rendering it an attractive holding. Sales and margins are showing improvements as a result. A company with the wherewithal to anticipate trends is one that investors can view as having unrealized capital gains upside. Could Brunswick Corporation (NYSE:BC) be one such stock?
Its Marine Engine segment’s sales are growing behind gains in marine rentals and sales, as a multi-year uptrend persists. Management is taking the right steps to keep costs contained and position itself properly in the current environment.
More notably, perhaps, the fitness business has resumed a growth trajectory, as the company launches new items. It will probably continue to experience healthy demand from facilities, with gyms aiming to stem the competition, and one up another in terms of creature amenities.
Brunswick Corporation (NYSE:BC) shares seemingly do not fully reflect the long-term prospects for the company, in light of investments in product innovation, another aspect I see as key to a company’s growth outlook. It should be considered for its three- to five-year earnings prospects and for its subdued P/E multiple.
The well-known leader among a thriving industry still has the wind at its back, so to speak. Sales of motor homes are forecast to climb 15%. Sales of travel trailers and so-called “fifth wheels” that attach trailers to trucks are in line for 9% growth.
Sales expansion has been robust to start off the fiscal year (ending in September), marked by an 88% jump in motor home revenues for the March period. The bottom line over that time expanded from break-even to $0.48 a share. Winnebago Industries, Inc. (NYSE:WGO)’s bounce back is apt to be sustained in light of the industry forecasts. It has also coincided with outstanding profit improvements from competitor Thor Industries.
Winnebago Industries, Inc. (NYSE:WGO) shares, up substantially from a year ago, have been stuck in the mud this year amid the broader rally. Its market valuation has accordingly fallen to where it might be considered for purchase by value investors.
The equities discussed here are backed by companies with products in demand by consumers at this juncture (Brunswick Corporation (NYSE:BC) and Winnebago Industries, Inc. (NYSE:WGO)), as well as one that operates with a growth strategy in a stable market sector (The Fresh Market Inc (NASDAQ:TFM)).
The Fresh Market Inc (NASDAQ:TFM) is a supermarket company with a growth strategy that ought to benefit from room for expansion in the industry. A concern of overexpansion does not seem warranted. Investors might want to play the stock’s current rebound.
Brunswick Corporation (NYSE:BC) is complementing its rapidly growing marine engine business with innovation in its fitness unit. Its legacy bowling and billiards segment is a bit of a drag on earnings, but overall, its prospects are bright. The shares seem to have sold off modestly, creating a chance to buy.
Finally, Winnebago Industries, Inc. (NYSE:WGO) is at the forefront of an industry in a cyclical rebound. Its stock holds appeal at the current valuation.
Each of these stocks would make a good addition to your Motley Fool Watchlist.
Damon Churchwell has no position in any stocks mentioned. The Motley Fool recommends The Fresh Market. The Motley Fool owns shares of Winnebago Industries (NYSE:WGO). Damon is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 3 Stocks for the Summer of 2013 originally appeared on Fool.com is written by Damon Churchwell.
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