As the summer heats up, stimulus checks, the partial or complete reopening of most states, and a significant drop in new jobless claims reported by the Labor Department all make things look more upbeat for mid-2021. Some companies are well-positioned to make the most of America's return to relative normality. The Walt Disney Company (DIS 0.16%), Camping World Holdings (CWH 1.18%), and Amazon (AMZN -2.56%) all have bullish momentum in the current economy and are among the enterprises you might want to keep an eye on.
1. The Walt Disney Company
While its shares are priced less than 10% below their all-time high, set earlier this year during the stock market frenzy of the spring, Walt Disney has some genuinely good things going for it right now. Its worldwide theme parks completed reopening by mid-June, taking a major step toward bringing this income stream back online. As the company's 2020 annual report described, the "most significant impact of COVID-19 on fiscal 2020 operating results was an estimated detriment of approximately $6.9 billion on operating income at our Parks [...] due to revenue lost as a result of the closures or reduced operating capacities." With half the year still to go, pent-up demand should win Disney at least several billion for its top-line as people return to Disneyland and other attractions.
Disney's successful hybrid release of Black Widow, the latest Marvel Studios' superhero movie, foreshadows ongoing growth for Disney. By showing the film in physical theaters and streaming it on Disney+ Premier, "the Mouse" boosted its gains higher. Disney+ Premier earned $60 million, the American box office added $80 million of ticket sales, and international in-theater screenings raked in $78 million for an estimated $215 million opening weekend total.
Image source: Getty Images.
With its streaming and box office success, and the reopening of theme parks to provide another revenue stream, Disney is a strong U.S. stock to watch in July. It has a high valuation currently but could climb even higher by year's end.
2. Camping World Holdings
When many sources of entertainment like restaurants, cruise ships, and casinos were shut in response to the pandemic, Americans, seeking the freedom of the outdoors, launched a new trend for recreational vehicles (RVs) last year. Industry data shows the trend is still growing powerfully. Its future likely secured with 22% of new owners now 34 years old or younger, Camping World Holdings is actively building itself into the market leader.
Looking for the freedom of the outdoors and the beauty of blue skies, green landscapes, and fresh vistas at the time when most of the usual sources of entertainment like restaurants, cruise ships, and casinos were shut by government fiat, Americans launched a new trend for recreational vehicles (RVs) last year. Industry data shows the trend still growing powerfully, its future likely secured with 22% of new owners now 34 years old or younger, and Camping World Holdings is actively building itself into the market leader.
Pursuing a vigorous, multi-pronged strategy to reach its new annual earnings goal of $1 billion, Camping World has been cashing in on the surge in RV interest. Its first-quarter 2021 revenue of $1.56 billion surged 51.5% year over year, and its net income increased from a narrow loss in Q1 2020 to a positive $147.4 million this year. This income jump marks the latest success in a prolonged upswing that has seen the company growing at an 18.1% compound annual growth rate (CAGR) over the past five years. The company's stock also continues to pay dividends at a generous 2.6% yield.
Rather than just selling new RVs, Camping World is reinvesting its cash into building a stronger business with multiple income sources. Its latest initiatives include opening a used RV marketplace, selling RV furniture, and continuing to expand its nationwide network of SuperCenters, which provide not only new sales but RV parts and service.
In pursuit of its goal of having SuperCenters in all 48 contiguous U.S. states, it acquired a property in Vermont during the first week of July and expects to open its first SuperCenter there in 2022. It also invested in Happier Camper, maker of the Adaptiv modular RV fixture system. The system enables RV owners to "plug in" a selection of modules into an empty RV shell to fully customize the interior to their needs, wishes, and budget.
Considering the robust, ongoing growth in RV sales, ownership, and use, Camping World's stock is still surprisingly cheap at just under $40 per share at the time of writing. As the RV lifestyle continues attracting new blood, and Camping World broadens its offerings and geographic reach, expect to see this stock climb higher.
3. Amazon
Going from strength to strength for years, Amazon has won its place among the top 3 U.S. stocks for the month as it continues building its market dominance.
Amazon has become the world's premier online marketplace, as underlined by such metrics as an over 100% year-over-year increase in "Prime Day" event sales. Sales from Amazon's small business partners landed at $1.9 billion for the two weeks prior to Prime Day, according to a press release. Amazon Web Services (AWS) is an even more powerful money-making engine, showing 32% year-over-year growth as of Q1 2021. According to former CEO Jeff Bezos, "AWS has become a $54 billion annual sales run rate business competing against the world's largest technology companies, and its growth is accelerating."
The company also continues to find new sectors to enter, epitomized by its recent "telehealth" plans. Although its marketing and Web services are the most profitable elements of its operations today, it also has established a dominant and growing position in online retail as a marketplace for third-party sellers. Amazon even dabbles in fintech services.
Amazon isn't doing anything particularly out of the ordinary in July. But its version of "ordinary" is ongoing, with strong diversification and growth. No tree grows to the sky, according to an old saying. But Amazon still appears green and flourishing, spreading its branches into new areas while remaining solidly rooted in its lucrative Web-services business. As vague rumors of a stock split travel along the Internet airwaves, there has likely never been a better time to add Amazon to your portfolio if you're investing in tech stocks, or to beef up your existing holdings.
