3 Themes for Investing in the Great Reopening

For the past year or so, we have been talking about how to invest while the pandemic was ravaging the country. People were sitting cooped up at home and trying to do all their work, school and entertainment while maintaining social distancing.

But as more people get vaccinated, Americans are showing a great appetite for going out, even as they hang on to some of the stay-at-home habits they’ve built over the past year, such as getting food and groceries delivered (for example).

In fact, some of the restaurants reporting results now, are seeing evidence of people “treating” themselves, i.e., spending more per person on appetizers and desserts than they typically would. Restaurants really took it on the chin as the first thing people stopped doing last year was eating out. Those that jumped to a digital/delivery model managed to keep their noses above the water. But many mom 'n pop outfits had to close doors, and some barely survived on stimulus checks.

Restaurant companies are looking up this year and the stocks should also do well. This is a segment that is likely to do a lot of hiring as well this year as they cater to the growing demand for dining even as delivery remains strong. Some of the more attractive stocks here are DRI, CHUY, CMPGY, PLAY, FAT and YUM.

Along the same lines, and for much the same reason, leisure stocks should also do well this year. Companies looking attractive here are Academy Sports and Outdoors, Inc. (ASO), American Outdoor Brands (NASDAQ:SWBI), Inc. AOUT, Smith & Wesson Brands, Inc. SWBI, Clarus (NASDAQ:CLAR) Corporation CLAR that supply outdoor clothing and gear, hunting, fishing, camping, shooting and personal security and defense products; Escalade, Inc. (ESCA), which supplies sports goods and equipment like table tennis tables and equipment, pool tables and equipment, other game tables like table soccer and table hockey, basketball systems and archery equipment; and boating companies like Brunswick Corporation (NYSE:BC) and OneWater Marine Inc. (NASDAQ:ONEW).

The second theme is around staffing. As more offices and stores start reopening, companies that had to furlough or lay off employees are likely to start hiring again. These will typically be the small and medium sized businesses (SMBs) because the large ones survived the crisis anyway while the small ones wrapped up completely. So companies with exposure to SMBs, which would be the staffing firms of course but also tech suppliers like Microsoft MSFT and Western Digital WDC.

The staffing firms looking good now are Heidrick & Struggles International, Inc. HSII, TrueBlue, Inc. TBI, Cross Country Healthcare (NASDAQ:CCRN), Inc. CCRN, ManpowerGroup (NYSE:MAN) Inc. MAN, RCM Technologies, Inc. RCMT and Randstad Holding NV RANJY.

The third theme is to do with advertising. The ad business suffered a big blow last year as businesses curtailed non-essential expenses, leading them to cut marketing spend. But this year is turning out to be a big one for these companies as most of them expect to see a return to regular operations.

Certainly, the reports coming in from GOOGL, FB and several others are extremely encouraging. From among the many choices available here, GOOGL, IIJIY and SOHU stand out while CXDO (NASDAQ:CXDO), TRUE, ZG and ZS are also worth considering.

Advertising and marketing stocks IPG and PUBGY are other good picks.

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Microsoft Corporation (NASDAQ:MSFT): Free Stock Analysis Report

Sohu.com Inc. (NASDAQ:SOHU): Free Stock Analysis Report

Darden Restaurants, Inc. (NYSE:DRI): Free Stock Analysis Report

Western Digital Corporation (NASDAQ:WDC): Free Stock Analysis Report

Cross Country Healthcare, Inc. (CCRN): Free Stock Analysis Report

Heidrick & Struggles International, Inc. (HSII): Free Stock Analysis Report

Alphabet Inc. (NASDAQ:GOOGL): Free Stock Analysis Report

TrueBlue, Inc. (TBI): Free Stock Analysis Report

Clarus Corporation (CLAR): Free Stock Analysis Report

Internet Initiative Japan, Inc. (IIJIY): Free Stock Analysis Report

American Outdoor Brands, Inc. (AOUT): Free Stock Analysis Report

Smith & Wesson Brands, Inc. (SWBI): Free Stock Analysis Report

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