It’s time to finish the year off strong.
This year got off to a historically bad start as stocks suffered their worst-ever two-week period to open a year. Thankfully, markets have staged a rebound since then, and the Standard & Poor’s 500 index is up about 6 percent going into the fourth quarter. That said, the year isn’t over yet — it’s time to finish the year on a strong note. The following names are poised to do just that, either because they’re strong consumer stocks or because they simply are priced too attractively to ignore.
Amazon.com (ticker: AMZN)
The ultimate online retailer is a timely stock to buy for the holidays. Amazon CEO Jeff Bezos is laser-focused on great customer service, quick delivery and product affordability — all things he correctly notes that consumers will still care about 10, 20, or 50 years from now. One can certainly make the argument that AMZN stock is a bit pricey at several hundred times trailing earnings, but long-term shareholders should still continue to reap the benefits of this visionary company. Once consistently unprofitable, Amazon’s high margin cloud computing arm, Amazon Web Services, now reliably churns out enough profit to finance the rest of the company’s costly endeavors.
Ulta Salon, Cosmetics & Fragrance (ULTA)
Ulta has quietly been one of the best-executing public companies in the stock market for the last 10 years. The beauty retailer and salon has managed to meet its ambitious expansion targets in recent years, and doesn’t plan to stop any time soon. In 2014, Ulta announced plans to open 500 new locations in the subsequent five years, a 70 percent increase from its 715-count store base at the time. Last quarter, ULTA opened 24 new locations, increased same-store sales by 14.4 percent and boosted online sales by 54.9 percent. After a recent pullback, one insider snapped up shares, yet another bullish sign for Ulta shareholders.
Intel Corp. (INTC)
Intel, a quarter-after-quarter cash cow, is a good company. Its stock also happens to be fairly cheap, pay a healthy dividend, and exhibits relatively low levels of volatility. So while INTC may not really have much to do with the fourth quarter or the holidays, it’s still a solid buy, almost regardless of the quarter. Shares go for just 13.3 times forward earnings going into the fourth quarter, nearly 30 percent cheaper than the S&P 500, which goes for 18.4 times forward earnings. What’s better, Intel has almost $4 per share in cash on its books, providing some downside protection.
Boston Beer Co. (SAM)
For those throwing one or two back over the holidays, consider buying Boston Beer, the brewer behind the Samuel Adams brand. While the recent obsession with microbrews has made for slowing growth in recent years, SAM is still a relatively small player in its industry, especially after the $100 billion SABMiller merger with Anheuser-Busch InBev (BUD). That puts Boston Beer in an interesting position — it can both acquire much smaller, hipper craft breweries to boost sales growth, but it could also easily be snapped up by one of the beverage industry’s behemoths.
Mastercard (MA)
The fourth quarter of the calendar year is typically the best one, financially speaking, for the majority of U.S. companies. Wall Street can thank the consumer for that, as a whopping 70 percent of the economy is driven by consumer spending. What better way to bet on the U.S. consumer than Mastercard, the second-largest credit card company in the States. MA is a little more attractively priced than its rival Visa (V), and after buying back $462 million worth of stock in the second quarter, the company is still approved to redeem another $2.7 billion in shares.
Chipotle Mexican Grill (CMG)
Chipotle has been an operational nightmare for the last year or so, but if you’ve got an appetite for risk, CMG is the stock for you going into the fourth quarter. Several highly publicized outbreaks of food-borne illnesses over the last year caused the stock to plunge 40 percent, but those incidents seem to be firmly in the past. Not only has CMG stock found a pretty firm bottom around $400/share, a recent vote of confidence from hedge fund bigwig Bill Ackman, who took a 9.9 percent activist stake in the burrito chain, is reassuring.
Alibaba Group Holding (BABA)
Last but not least, Chinese online retail behemoth Alibaba is well-poised to cash in big in the fourth quarter. While holiday purchases are a boon to all retailers, BABA has an ace up its sleeve: an invented shopping holiday in November. Nov. 11, known as “Singles’ Day” for its 11/11 signification and its celebration of the single life, is Alibaba’s biggest sales day of the year. In 2015, Singles’ Day sales soared 60 percent, reaching an incredible $14.3 billion. Alibaba has also been extremely strong in mobile — it has 427 million monthly users — and its eye-popping 59 percent revenue growth rate in the second quarter shows BABA isn’t close to slowing down.
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7 Stocks to Buy for the Fourth Quarter originally appeared on usnews.com
