Which stocks to watch amid accelerating economic growth? - Kalkine Media

October 30, 2023 02:57 AM PDT | By Akanksha Vashisht
Follow us on Google News:

Summary

  • GDP data released by the Bureau of Economic Analysis showed that the U.S. economy has expanded by 4.9% in the third quarter of 2023.
  • Deckers Outdoor Corporation, a retailer of performance clothing and footwear, closed 19% higher on an intraday basis on Friday.
  • com Inc., a globally recognized online retailer, closed 6.83% higher on an intraday basis and by around 50% higher on a YTD basis on Friday.

The latest advanced GDP estimate released by the Bureau of Economic Analysis showed that the U.S. economy has expanded by 4.9% in the third quarter of 2023. This marked the fastest growth of GDP increase in the US economy over the last two decades. 

Consumer cyclical stocks are a category of stocks that are closely tied to the economic cycle and consumer spending patterns. These stocks belong to companies whose products and services are considered non-essential, meaning they are more likely to be purchased when consumers have disposable income.

ALSO READ: Examine these two consumer cyclical stocks priced under $20

With that, let us examine two consumer cyclical stocks that can be an interesting watch after the latest GDP release.

Deckers Outdoor Corporation (NYSE: DECK)

Deckers Outdoor is engaged in the creation and retail of performance footwear, clothing, and accessories. Most of its product distribution occurs via the wholesale channel, although it also maintains a significant direct-to-consumer presence.

During Q2 2024, net revenue surged by 24.7% to reach US$1.092 billion, a notable increase from the previous corresponding period’s net revenue of US$875.6 million. When considering constant currency rates, the growth was still substantial at 24.2%.

The operating profit during the quarter saw a significant rise to US$224.6 million, surpassing pcp’s US$127.8 million. Diluted earnings per share also experienced an uptick in Q2 2024, standing at US$6.82 compared to the earlier US$3.80.

Image Source: ©2023 Kalkine®; Data Source: Company Reports

In terms of financial holdings, cash and cash equivalents grew to US$823.1 million from US$419.3 million. Moreover, inventories decreased to US$726.3 million from US$925.0 million. It's worth noting that the company had no outstanding debt at this time.

Based on Friday’s closing price of US$576.12, DECK has a P/E ratio of 20.90x. The stock was around 19% higher on an intraday basis at Friday’s close.

ALSO READ: Find out why these biotechnology firms surpassed market gains

Amazon.com Inc. (NASDAQ: AMZN)

Amazon is a prominent player in the online retail sector and ranks among the top performers in the e-commerce industry. In 2021, it achieved US$386 billion in net sales and an estimated total of around US$578 billion in online gross merchandise volume, encompassing both physical and digital goods.

In Q3 2023, net sales saw a 13% rise, reaching US$143.1 billion. Operating income in the same quarter surged to US$11.2 billion, marking a substantial increase from the US$2.5 billion reported in Q3 2022.

Image Source: ©2023 Kalkine®; Data Source: Company Reports

Net income for the third quarter also grew to US$9.9 billion, equivalent to US$0.94 per diluted share, a significant improvement compared to the US$2.9 billion, or US$0.28 per diluted share, reported in Q3 2022. 

Furthermore, operating cash flow experienced a remarkable 81% increase, amounting to US$71.7 billion for the trailing twelve months, compared to US$39.7 billion for the twelve months ending September 30, 2022.

Based on Friday’s closing price of US$127.74, AMZN has a P/E ratio of 62.43x. As at the close of trade on Friday, AMZN stock price grew by 6.83% on an intraday basis and by around 50% on a YTD basis.

 


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.



Top Listed Companies