3 Ways To Invest In The Economic Reopening
Believe it or not, the post-pandemic economic reopening is upon us. What this means is more people moving about, going to work, and visiting all those places we’ve longed to visit over the past year. The reopening may take some time to gain momentum, but by the end of the year, we expect the economic picture to look much different than it does now. Until then here are three more stocks to put on your watch list that we think are well-positioned to benefit from the reopening.
G–III Apparel Gives Wow Guidance
While business has yet to regain its post-pandemic levels, apparel retailer G-III Apparel (NASDAQ: GIII) is well on track to regain those levels. The company just released its q1 results and by the look of things, the rebound is already well underway. The company reported $519.91 million in net revenue which is up 28.3% from last year and beat the consensus by over 1000 basis points. Revenue strength was driven by demand in most segments and augmented by a lower promotional environment as well as restructuring efforts. Notably, the gross margin rate improved by nearly 700 basis points and inventories fell by 30% to aid a substantial beat on the bottom line. On the bottom line, the company's GAAP EPS of $0.53 more than doubled the consensus estimate and the guidance is even better.
The company is expecting a seasonal downtick in second-quarter revenue to a level below consensus but that is offset by expectations for the second half of the year. For the full year, the company is expecting net sales in the range of $2.57 billion versus the consensus of $2.54 billion which implies second-half revenue will surge 60% from the first half and rival or top pre-pandemic levels. Shares are up more than 10% on the news and setting a new 2 year high. In our view, the stock should continue rising throughout the summer and may set a multi-year high near $50 by the end of the year.
Concrete Pumping Holdings Is Driven By Multiple Tailwinds
We like Concrete Pumping Holdings (NASDAQ: BBCP) because it is supported by multiple tailwinds. Not only is the company supported by general reopening activity, but it is also supported by housing trends, and plans for infrastructure spending. The company just released preliminary Q2 results that not only beat the analyst consensus but show year-over-year growth despite the Texas deep freeze. The Texas deep freeze cut deeply into the construction industry among many others which means the results would likely have been even better than they are. Regardless, the Q2 preliminary revenue of $76.90 million is up 3.9% from last year and beat the consensus by 900 basis points.
Shares of the stock jumped more than 3% on the news. The move is a continuation of a multi-month rally that began last year and one that we believe will continue moving higher throughout the summer. The next major hurdle for price action is at $10 which should be reached soon, if that level can be surpassed we see this stock moving quickly higher to retest the all-time high near $12.
Norwegian Cruise Lines Expands Its Planned Sailings
The cruise line industry made big headlines last month when the major operators began rescheduling sailings and that trend is gaining momentum. The latest news comes from Norwegian Cruise Lines (NYSE: NCLH) which unveiled several new planned sailings from the US including one to Alaska. The Voyages are contingent upon obtaining a conditional sailing certificate from the CDC and rely on fully vaccinated guests and crew but are expected to sail.
The news has the entire cruise industry moving higher with Norwegian Cruise Line leading the way. Shares of NCLH Rose 1% in premarket trading and extended that to more than 3.5% early in the day. With the group trading so close to its post-pandemic high, we expect to see a big move fairly soon. Once Norwegian surpasses the $35 level, we expect to see the market rally back up to the $55 level.
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