Here at the midpoint of the month, it might be useful to stop and take a look at the stock tickers that traders are talking about more than others. Sometimes a story is brewing, and other times it's already happened. If a company's got the market buzzing, though, it's just smart to know it. After all, opportunities present themselves to investors ready to find them.
With that as the backdrop, here's a closer look at the four consumer stocks people are talking the most about. That doesn't necessarily make them a buy or a sell, but it doesn't mean they aren't one of those two things either.
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1. Darden Restaurants
Shutdowns meant to curb the COVID-19 pandemic were tough on most businesses, but arguably, no industry suffered as much as the restaurant business did. Drive-thrus and deliveries just weren't enough. The National Restaurant Association estimates last year's restaurant revenue in the U.S. was a disappointing $659 billion, falling $240 billion short of last year's initial industry projections.
There's a light at the end of the tunnel, however, now that vaccines are more widely available. And while that's good news for all restaurant names, investors are particularly stoked about the positive effect this rebound could have on Darden Restaurants (DRI 1.26%), parent to popular chains like Olive Garden, Cheddar's, and Longhorn, just to name a few.
It makes sense. So-called "sit down" casual restaurants were off-limits or severely restrained when the coronavirus contagion was at its worst, but fast food chains with drive-thrus were considerably more accessible. Now, having not been able to comfortably enjoy a nice, served meal in many months out of concern over the coronavirus, consumers are ready for just that. A recent survey performed by Groupon indicates trying a new restaurant is second only to hugging friends and family on consumers' agendas once COVID-19 is put in the rearview mirror.
2. fuboTV
Shares of streaming cable TV company fuboTV (FUBO +0.00%) were roaring higher in the latter part of last year, but it's been nothing but down, down, down so far in 2021. The stock's recent new multi-month low is nearly 70% below its December peak, and against a backdrop of investor lawsuit announcements, fuboTV shares look primed to move even lower. Maybe they will.
Don't read too much into the rhetoric, though. Virtual cable is a significantly more marketable and more affordable alternative to traditional cable TV, and fubo's got the subscriber growth to prove it. As of the end of last year, it's serving 548,000 customers, nearly doubling its headcount from just a couple of quarters earlier.
Curiously, though share prices continue to fall while analysts' price targets haven't wavered. They're still saying this stock's worth around $45 per share, which is more than twice what the stock's trading at now.
3. GameStop
It's not just a storied stock. GameStop (GME +1.53%) is the proverbial poster child for meme stock mania that's dominating headlines this year. Shares soared in January as part of a coordinated short squeeze set up by a handful of hedge funds betting against the video game retailer, only to lose most of that gained ground just a few days later. While not as volatile as it was then, this name remains a pawn in the war between a few big bears and a lot of small bulls.
The story is evolving, though. Activist investor Ryan Cohen is positioned to become the company's next chairman, and GameStop announced on Monday that current CEO George Sherman is stepping down from the post on July 31, or sooner if the company finds a replacement in short order. No candidates have been named yet, but a new approach is already gelling. Cohen says he'd like to see the retailer rely less on brick-and-mortar business and evolve into what's described by some as the "Amazon of gaming."
The move could be a much-needed change for the struggling company, although it remains to be seen if the world needs this sort of video gaming middleman.
4. AMC Entertainment
Finally, another major meme stock name from earlier this year -- AMC Entertainment (AMC +0.00%) -- still has traders in a tizzy.
Like restaurants, the coronavirus pandemic was particularly tough on movie theaters. Studios withheld films from distributors that weren't allowed to operate at full capacity (when they were allowed to open at all). AMC's top line tumbled 77% last year, driving it to a net loss of $4.6 billion. Adjusted EBITDA and adjusted cash flow were both negative to the tune of $1 billion, pushing the company to the brink of bankruptcy. Were it not for January's short squeeze, shares could have easily continued their march into record-low territory this year.
Maybe these buyers are onto something, though.
With COVID-19 vaccines now being widely distributed and all of AMC Entertainment's locales open for business -- even if at limited capacity -- the path to a complete recovery is coming into view.
Macquarie Analyst Chad Beynon believes the U.S. theater business could rebound to more than 90% of its 2019 levels in the foreseeable future, and Warner's recently released Godzilla vs. Kong has driven an impressive $339 million worth of worldwide box office ticket sales in just a couple of weeks, according to numbers from Box Office Mojo. They're both encouraging clues that the movie theater business is far from dead, though investors should still brace for lots of volatility.
