With the U.S.-China trade tensions easing, now could be a great time to add some consumer goods companies to your portfolio. Consumer goods stocks have been particularly hard hit with tariff worries, so this is a great sector to do some bargain hunting.
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Let's look at three stocks to buy right now.
Amazon
Amazon (AMZN 0.18%) is both the leading e-commerce company in the world as well as the largest cloud computing company. It's also become one of the world's largest digital advertisers on the planet. That's a powerful combination that sets the company apart from others in the space.
The company's fastest-growing and most profitable business segment is its cloud computing business, Amazon Web Services (AWS). Here, it benefits from customers looking to build artificial intelligence (AI) models and apps on its platform and then run them on its infrastructure. The business is currently capacity-constrained, and Amazon is investing heavily to build out its data center infrastructure.
AI is driving more than just one part of its business, though. The company is leveraging it across its warehousing and logistics networks to cut costs and improve efficiency. It's also using AI with its e-commerce platform to improve product recommendations and help third-party sellers more easily create listings. In addition, AI is powering its sponsored ads business by improving targeting and helping create higher-quality ad campaigns.
Best of all, the stock is still trading at a nice discount to historical levels.
JAKKS Pacific
With trade tensions easing, it looks like we could be back to 30 dolls for Christmas instead of just two. That's great news for toymaker JAKKS Pacific (JAKK -0.52%).
While lesser known than its peers Mattel and Hasbro, JAKKS has been transforming its business over the past few years since John L. Kimble took over as CFO following stints at Mattel and Walt Disney. The company has always had a strong licensed toy and costume business, but it has been focusing on increasing the size of its non-licensed business. It also signed a deal with Authentic Brands, owner of Roxy, Juicy Couture, Quiksilver, and other brands, to offer outdoor seasonal items such as beach accessories and skateboards. While still in the test-and-learn phase, it could help boost growth and decrease some seasonality.
The company started the year strong, with its sales up 26% and its gross margins improving by 1,000 basis points. The strong results were driven by products related to the Sonic the Hedgehog 3 and Disney's Moana 2 movies. A solid movie slate from the end of last year and this year should help its results.
Best of all, the stock is very cheap, trading at a forward price-to-earnings ratio (P/E) of just over 7 times based on 2025 estimates. It also carries no debt and has nearly $60 million in cash, which is around 24% of its market cap.
e.l.f. Beauty
e.l.f. Beauty (ELF 1.37%) has been seeing incredible growth over the past few years. However, it began to see softer trends at the start of this year, which caused it to lower its fiscal Q4 sales guidance to growth of between negative 1% to positive 2% after seeing 31% sales growth in fiscal Q3. The reduced guidance, combined with tariff worries, has since led the stock to plummet.
However, e.l.f. looks more like a broken stock than a broken company at this point. The company shook up the cosmetics industry, employing a fast-follower strategy to make cheap alternatives to popular prestige products and using a vast influencer network to reach its target audience. The strategy resulted in taking significant market share in the mass-market cosmetics space and gaining a lot of shelf space. In fact, the company was set to gain even more shelf space this spring, including at Target.
e.l.f. will have the opportunity to use this same playbook with other adjacent markets, such as skincare and possibly fragrance and haircare. It already has a solidly growing skincare line, which it bolstered with the acquisition of Naturium in the fall of 2023.
It's also done well in international markets, with sales up 66% last quarter. Currently, about 20% of its sales come from international markets, and it still has a lot of room to continue to expand.
With a forward P/E of 19 times based on fiscal 2026 analyst estimates and a 0.36 price/earnings-to-growth (PEG) ratio, the stock is cheap. PEGs below 1 are considered undervalued.
