Consumer Goods Stocks: Advice on the Best Companies

What are the best stocks on consumer goods? If you are wondering what are the companies in the discretionary goods sector that are currently performing better, then you’ve come to the right place.

In this article we will see a list of companies in the “discretionary goods” in which you could invest, and then I will give you my opinions on the convenience or otherwise of a possible investment in this sector.

Investing in the consumer discretionary sector means choosing retailers, clothing companies, media, restaurants, service providers that are not deemed essential, on which consumers spend their extra income.

We can also call them luxury goods, Therefore non-essentialthe consumption of which is strongly linked to the trend of the economy.

If you want to know more continue reading the article.

Best stocks on discretionary goods

Let’s see what they are now! But first, I suggest you fill out the quiz below: you will understand what kind of investor you are and thus you will be able to buy the best shares for you.

Nike

It is a US multinational manufacturing company footwear, clothing e sports accessories. It was created in 1971 and is based in Beaverton, in the Portland, Oregon metropolitan area.

It is the largest supplier of sports equipment in the world, and is also the technical sponsor of various football teams, including clubs and national teams.

The data tells us that Nike has provided its shareholders with a annualized total return at 10 years of 22.7%.

It definitely established one dominant position in footwear: I challenge you to look for someone who hasn’t bought a pair at least once in their life Nike shoes.

Its strength certainly lies in innovation and in the use of testimonialwhich it chooses with care: in this way the company links the success of high-profile athletes (Cristiano Ronaldo, Rafa Nadal, LeBron James, just to name a few) to its products.

The pandemic has impacted this company’s business, as it has impacted most industries and businesses, though the company has managed to cushion the blows with apps like Nike Training Club and accelerating the transition to digital channels: in this way its profits have grown all the same, even if at a slightly slower pace.

In the long term, forecasts for Nike are positive, thanks above all to innovation and the expansion of the e-commerce channel.

To date, a Nike share costs around $114, and the graph shows us that in June 2021 there was a very significant rise due to the awakening of the American market.

In the last month (July 2022), the company also benefited from +9.57%.

Here you can read the review on how to buy Nike shares.

Starbucks

It’s a chain of american coffee, founded in Seattle in 1971. We are talking about the largest chain of its kind in the world, which has about 30,000 points of sale in 78 countries.

Its strong point is, in addition to selling only its own brand of coffee, that of providing the consumer with a one-of-a-kind and unrepeatable experience.

In fact, its outlets are often crowded, and most of the population starts the day almost every morning with a Starbucks coffee.

It has been, in recent years, one of the top consumer discretionary stocks to own, reporting an annualized total return of 35.9%.

Expansion into China will further grow revenues, and its unique strategy will enable further growth for the stock.

One of its shares currently costs around 83 euros, and the graphic it shows us constant growth since the beginning of the year, with good forecasts for the future.

The review can be found here.

The Walt Disney Company

Better known only as Disney, is an American multinational corporation headquartered in Burbank, California, and was founded in 1923 by Walt Disney and his brother.

Initially it was an animation studio, and subsequently it began to produce animated feature films, until it diversified the business and began an exponential growth, which led it to enter the tourism and theme parks sector (Disneyland), as well as entertainment and merchandising.

It entered the Stock Exchange in the 1950s, and since 1991 it has been a component of the Dow Jones stock index.

His films are famous all over the world, and he owns a unparalleled intellectual property assets, with a business model to diversify and transform blockbuster films into additional lines of business.

Despite the setback of the pandemic, which closed cinemas and theme parks, Disney was able to recover: in fact, the launch of the streaming platform is at the end of 2019 Disney+ which allows consumers to watch many film and cartoon productions in streaming by paying a fee for a monthly subscription. At the moment the platform has more than 100 million subscribers.

The future predictions are positive, both for the growing revenues deriving from the platform, and for the reopening of the theme parks. The month of July recorded a +9.30%.

Game Stop

Between best video game actions we find GameStop, a United States company headquartered in Grapevine, Texas. It’s about the biggest retailer of new and used video games in the world, but also deals with the sale of accessories for video games, consoles and other electronic devices. It also sells board games.

It sells its products all over the world.

GameStop has been at the center of attention in recent months by the investor community: in fact, on January 27, 2021, GameStop shares, listed at the beginning of the year at 17 dollars, shot up to the exorbitant figure of 348 dollars (in fact, in the graph we can see a very high peak).

This can be traced back to the Reddit group, which has 9.4 million subscribers and discussion topics that include trading stocks and options.

The purchase of large quantities of the company’s shares caused what in financial jargon is called “short squeeze”, resulting in a dizzying increase in the price.

A share of Game Stop currently costs around $34, and its returns are proving to be fairly consistent. It could be a good investment in the long run.

The last six months, therefore starting from February 2022, the stock has recorded a good +34.78%.

Here is the in-depth review on GameStop stock.

Tapestry

It is an American multinational holding company dluxury fashions. It is based in New York and owns three major brands: Coach, Kate Spade and Stuart Weitzman.

Tapestry reported net income of nearly $200 million for the fourth quarter of 2021, plus its digital sales were up 35% and 200% from pre-pandemic levels.

The push on the market also comes from the Chinese market, as revenues in that market grew by 30% at the end of 2020.

Their strategy is also based on partnerships with influencerevents in live streaming and interactive digital experiences.

A clear example of the brand’s success is the heart-shaped bag by Kate Spade, which went viral on Tik Tok, sold out in January. (By the way, here’s the guide on how buy TikTok shares).

And’tapestry action it costs around 34 dollars, and long-term forecasts are positive, as it is driven both by the Chinese market and by the expansion of the luxury market, which boasts considerable growth.

Here you can read the review.

How to buy shares on discretionary goods?

Thanks to the web, the possibilities to buy shares are different and are technically simple.

If this is your first time thinking about stock investing, then I suggest you read the guide on the best securities deposits with and without a current account, so that you can get a more concrete idea.

If you know that having a strategy is very important, and you want to consciously buy shares, you can do it in two ways:

• Contact the traditional bank: if you plan to invest sums not exceeding 4,000 euros, then the normal current account could be suitable. In fact, banks in Italy offer the possibility of building a securities portfolio by working with them. In any case, know that the costs are often very high;
• Rely on online platforms: on the web you will find many of them specializing in the purchase of shares, and this path allows you to directly access the markets. By opting for this solution you will spend less than putting yourself in the hands of the banks, because this investment method is less expensive. Furthermore, with the platforms you can also buy shares by investing only €50. For smaller investments, they are often preferable in terms of user experience and above all the costs that you will pay.

Should you invest in stocks in the discretionary sector?

Now that we have seen a list of the best companies in the sector, let’s try to understand if it is a profitable investment.

The sector of consumer discretionary goods it is one of the cyclical sectors par excellence.

What does this mean?

That the sector will do very well during periods of economic expansion, as when households are financially well and confidence is at its highest, they will be inclined to buy more, to consume more, and consequently to allocate a part of their income to purchases of unnecessary goods.

Conversely, during recessionary periods consumers will not use their income to buy unnecessary goods or to treat themselves to something, so this sector will immediately suffer.

The period of the year is favorable for this sector because:

• Back to school has always been an important time for shopping
• September is seen as a kind of “new year”
• Christmas is approaching, and consequently Christmas shopping is upon us.

This favorable situation could lead you to get a rise in stocks until the end of the year.

An investment in these companies also seems to be beneficial as, according to some experts, sectors that were strong before the pandemic are likely to come back strong during the full recovery in consumption, and it seems that the moment is approaching.

They are also driven by constant innovation and business diversification: internet retailing and direct marketing are certainly two channels that keep sales high in the sector.

In conclusion, the sector has various potentials that can be exploited, and it seems that the post-pandemic period of recovery in confidence we are experiencing is the most favorable one for companies of this type.

I can’t tell you with certainty: “yes, invest” since it is a decision that is up to you alone, but I can try to provide you with the appropriate tools.

First of all I advise you, if you want to focus on some consumer companies, to do it with a view to diversifying your portfolio, and I also advise you to train and inform yourself before embarking on a journey on the financial markets.

In this regard, I leave you some resources with which you can start:

Finally, you will also find some guides dedicated to those who need a refresher before starting to invest:

Enjoy the reading!