4 Consumer Stocks To Buy As Markets See A Downturn

The stock markets in the U.S. as well as across the globe were in a state of frenzy on Sep 8, as markets reacted to the European Central Bank’s unchanged stimulus policy and rates, North Korea testing nuclear weapons and a sudden surge in crude prices.

The U.S. exchanges, which remained stable for most of summer, witnessed strong selloff that led them to close in the negative zone. The Dow Jones Industrial Average fell 0.3% to 18,479.91, while the S&P 500 declined 0.2% to 2,181.30. Also, the Nasdaq Composite dipped 0.5% to 5,259.48. Though the other factors did little to impact the U.S. stocks, the surge in crude prices took the market by surprise. However, the rise in crude prices was not enough to compensate for the losses elsewhere.

Further, investors await the Fed’s discussions on Sep 9 regarding, ‘whether or not’ a rate hike is in the cards later this month. The development is extremely crucial as it will be the deciding factor on the further strengthening of the U.S. dollar after the European Central Bank kept rates unchanged.

Some of the major losers yesterday were Pier 1 Imports Inc. (NYSE:PIR) and Tractor Supply Company (NASDAQ:TSCO) . While Pier 1 Imports lost volume due to the resignation of its CEO and lower comparable store sales, Tractor Supply saw its share price decline due to lowered guidance. Other losers on the list include Apple Inc. (NASDAQ:AAPL) , Tesla Motors Inc. (NASDAQ:TSLA) , Sprouts Farmers Market Inc. (NASDAQ:SFM) , to name a few.

However, we believe that the strong selloff on Thursday is not likely to persist as the U.S. economy continues to recover as evidenced by growth in jobs and other consumer data. We see an improvement in the job market and increase in consumers’ spending power, which indicates room for growth of consumer goods stocks.

That said, we feel that this dip in the stock market may provide an opportunity to invest in stocks in the consumer discretionary sector, which carry a favorable Zacks Rank and Value Style Score.

Value investing is basically the concept of putting one’s money into stocks that are undervalued in the market. In value investing, investors tend to hold a stock until it meets its target price and sometimes even longer, provided the company displays continued profitability.

Making the best pick might be a daunting task and this is where our new style score system and our proven Zacks Rank system come to the rescue. Our research shows that stocks with a Value Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the value investing space.

4 Consumer Discretionary Stocks to Buy

Here, we bring you 4 consumer discretionary stocks worth investing amid the stock market dip. Let’s find out what makes these stocks attractive.

Deckers Outdoor Corp. (NYSE:DECK) , a leading designer, producer, and brand manager of innovative, niche footwear and accessories developed for outdoor sports, and other lifestyle-related activities, is a solid bet. The stock boasts a Value Score of “A” and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Goleta, CA-based company delivered an average positive earnings surprise of 25.2% over the trailing four quarters, and has a long-term earnings growth rate of 10.84%. The Zacks Consensus Estimate too has trended up over the past 60 days. In addition, the stock has a P/E of 14.4 as against the industry P/E of 18.8.

Investors can also count on Delta Apparel Inc. (NYSE:DLA) , the designer, manufacturer, and seller of lifestyle basics and branded active wear apparel and headwear products in the U.S. and internationally. The stock carries a Zacks Rank #2 and has a long-term earnings growth rate of 15%. This Greenville, SC-based company delivered an average positive earnings surprise of 32.6% over the trailing four quarters and has a Value Score of “A”. The Zacks Consensus Estimate for fiscal 2016 too has trended upward over the past 30 days. Moreover, the stock has a P/E of 12.4 as against the industry P/E of 13.2.

We also suggest investing in Outerwall Inc. (NASDAQ:OUTR) , with a Zacks Rank #1, long-term earnings growth rate of 10% and a Value Score of “A”. This Bellevue, WA-based automated retail solutions provider delivered an average positive earnings surprise of 75.5% over the trailing four quarters. The Zacks Consensus Estimate too has been on the rise over the past 60 days. The stock has a P/E of just 7.5 against the industry P/E of 19.8.

Last but not the least, Party City Holdco Inc. (NYSE:PRTY) , with a Zacks Rank #2, long-term earnings growth rate of 14.5% and a Value Score of “A” is also a good pick. This Rockaway, NJ-based specialty retailer is a designer, manufacturer and distributor of party supplies in the U.S. and internationally. The company delivered an average positive earnings surprise of 1.4% over the trailing four quarters. The Zacks Consensus Estimate too has been on the rise over the past 60 days. Moreover, the stock has a P/E of 13.9 compared with the industry P/E of 17.4.



Confidential: Zacks' Best Investment Ideas

Would you like to see a hand-picked ""all-star"" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>

TESLA MOTORS (TSLA): Free Stock Analysis Report

APPLE INC (AAPL): Free Stock Analysis Report

PIER 1 IMPORTS (PIR): Free Stock Analysis Report

TRACTOR SUPPLY (TSCO): Free Stock Analysis Report

DECKERS OUTDOOR (DECK): Free Stock Analysis Report

OUTERWALL INC (OUTR): Free Stock Analysis Report

SPROUTS FMR MKT (SFM): Free Stock Analysis Report

PARTY CITY HOCO (PRTY): Free Stock Analysis Report

DELTA APPAREL (DLA): Free Stock Analysis Report

Original post

Zacks Investment Research