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Why These Consumer Goods Stocks Jumped Friday

By Daniel Sparks - Mar 14, 2020 at 9:44AM

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Monster Beverage, Under Armour, and iRobot all saw their stocks rebound from Thursday's big sell-off. But shares are still trading much lower than they were a few weeks ago.

Investors went for a roller-coaster ride this week. Between Monday and the close of market on Thursday, the S&P 500 cratered, falling a total of 16.5%. But a big jump on Friday offset about half of this loss. The S&P 500 finished the week down a total of 9%.

The broader-market gain on Friday was helped by a rise in stocks across many industries. Investors bought stocks aggressively in hopes that the market's recent pullback was an overreaction to the fears of the coronavirus' impact on the global economy. The market seemed particularly encouraged by President Donald Trump's national address on Friday afternoon. During the address, Trump declared the coronavirus a national emergency, and he detailed plans to mitigate the spread of the virus.

Consumer goods stocks didn't miss out on the market's gains on Friday. Three notable consumer goods stocks that saw sharp gains were energy beverage company Monster Beverage (MNST 2.04%), athletic apparel company Under Armour (UA 1.19%) (UAA 2.04%), and household robot company iRobot (IRBT 1.80%).

A chart showing stock prices moving higher on increased volume

Image source: Getty Images.

These three stocks saw the following gains on Friday.

Stock

Intraday High

Change by Market Close

Monster Beverage

8.9%

8.7%

Under Armour

11.7%

11.6%

iRobot

11.1%

11%

Data source: Yahoo! Finance.

A market rebound

While Trump's address may have been part of the reason for the market's rise on Friday, it's likely primarily the result of investors reassessing whether or not stocks had been oversold. While many economies around the world are likely to be negatively affected by the coronavirus, including the U.S., stocks may have fallen too far too fast in an attempt to price in these concerns. Indeed, on Thursday, the market saw its worst one-day decline since 1987. Going into Friday's trading, some investors may have been betting that the market was oversold, setting the stage for a rebound in stocks.

However, even after a 9.2% gain for the S&P 500 on Friday, the market index is still down 20% since Feb. 19, leaving stocks in bear market territory.

A buying opportunity?

Just as the overall market remains significantly below its high in February, these three consumer goods stocks are still trading much lower than they were in mid-February. Since Feb. 19, Monster Beverage, iRobot, and Under Armour are down 11%, 22%, and 37%, respectively. While all three of these companies will likely be forced to navigate unique challenges as the U.S. and other countries attempt to curb the coronavirus, investors should consider whether or not these challenges have already been fully baked into current stock prices.

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Stocks Mentioned

Monster Beverage Corporation Stock Quote
Monster Beverage Corporation
MNST
$94.59 (2.04%) $1.89
Under Armour, Inc. Stock Quote
Under Armour, Inc.
UAA
$8.50 (2.04%) $0.17
iRobot Stock Quote
iRobot
IRBT
$37.41 (1.80%) $0.66
Under Armour, Inc. Stock Quote
Under Armour, Inc.
UA
$7.67 (1.19%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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