Members of the consumer discretionary sector sell goods that are not considered to be ‘essentials’. So while outfits in the consumer staples sector might sell toothpaste, consumer discretionary companies sell things like luxury cars.
Indeed, this is a varied sector in terms of products. Anything that consumers might want to spend their disposable income on is included. This means entertainment, holidays, designer clothes and more all fall under the umbrella of this sector.
Consumer discretionary stocks are generally more vulnerable to recessions, as consumers’ spending power is reduced. However, periods of economic growth, where consumers have more disposable income, can leave these companies and their shareholders reaping the rewards.
Some of the largest consumer discretionary stocks include:
Amazon.com (NASDAQ: AMZN)
Netflix (NASDAQ: NFLX)
Walt Disney Company (NYSE: DIS)
NIKE (NYSE: NKE)
Comcast (NASDAQ: CMCSA)
Sony Group (NYSE: SONY)
Q4 Consumer Discretionary momentum stocks
Momentum refers to the speed or rate of change in stock price. Healthy price trends tend to exhibit strong momentum, and price weakens when momentum subsides. The following stocks have been enjoying a rise in momentum in recent weeks. Can their streak continue through Q4?
Tecnoglass Inc., through its subsidiaries, manufactures, supplies, and installs the architectural glass, windows, and associated aluminum products for the commercial and residential construction industries in North, Central, and South America. TGLS stock has been enjoying share price momentum over the past 12 months. It has a reasonable price-to-earnings ratio, and sales are increasing.
Acuity Brands, Inc. provides lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally. AYI stock enjoyed a share price bump after releasing Q4 results beating analyst estimates.
Ford Motor Company designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. Ford stock has been enjoying a boost in price momentum over the past twelve months. A recent partnership with Redwoods Materials could help Ford transition into electric vehicles while improving its financial outlook.
Q4 Consumer Discretionary growth stocks
Growth in sales and/or earnings per share indicates a business that is growing. Growth stocks can make very lucrative investments when the share price rises in time with the business expansion. But growth stocks are also risky as investment analysis is based on future price action rather than historical price performance. Famous growth investors include Philip Fisher, T. Rowe Price, and Jim Slater.
Best Buy Company, Inc. retails technology products in the United States and Canada. The company operates in two segments, Domestic and International. Best Buy recently introduced an annual subscription program with tech support and access to hard-to-find consumer goods. The company also agreed to acquire UK tech company Current Health. Short interest in BBY stock has been declining since August.
Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry. GPI stock has been enjoying price momentum, sales growth, and a rise in earnings in recent months. The company recently announced plans to acquire Prime Automotive Group.
Century Communities, Inc., together with its subsidiaries, engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. CCS is pioneering the online home buying boom. It is displaying sales and earnings growth.
Q4 Consumer Discretionary value stocks
Value investing is a prevalent type of stock market investing advocated by Billionaire investor Warren Buffett. When growth stocks are in favor, value stocks tend to be less popular and vice versa. Value stocks should be trading for less than their intrinsic or book value.
Signet Jewelers Ltd. is the world's largest retailer of diamond jewelry. The company is domiciled in Bermuda, headquartered in Akron, Ohio, and listed on the New York Stock Exchange. SIG stock appears in the value category for price-to-sales (P/S), price-to-earnings (P/E), and price-to-book ratios (P/B).
MarineMax, Inc. operates as a recreational boat and yacht retailer in the United States. It has plans to expand and recently announced it is acquiring Intrepid Powerboats. It is steadily growing sales and earnings. HZO stock appears in the value category for P/S, P/E, and P/B ratios.
DICK'S Sporting Goods, Inc., together with its subsidiaries, operates as a sporting goods retailer primarily in the eastern United States. DKS stock is displaying signs of sales and earnings growth. It also scores in the value category for P/S, P/E, and P/B ratios.