Did you know that we've been paddling through a recovery for more than a year?
The National Bureau of Economic Research reported this week that the recession ended last summer.
If you haven't broken out the party hats and Champagne glasses, you're not alone. The economy continues to send mixed signals and even the Fed is acting tenuously.
However, if the recessionary lull really is fading away in our rearview mirror, it may be a good time to buy into the stocks that thrive when discretionary income is weighing down our pockets. There are plenty of obvious plays, but I'm going to try to dig a little deeper beyond the first names that may pop into your head.
Leading cruise-line operator Carnival
Let's dig a little deeper and go with Steiner Leisure instead. The company operates the spas found in the world's largest cruise ships. They're the leading player in this niche, and even cruise lines that have tried to take spa management in-house have failed and returned to Steiner.
Steiner's latest quarter was seaworthy. Revenue climbed a hearty 28%. Earnings would have climbed even higher, if not for a currency-related hit. If Steiner is doing well now, imagine how it's going to be humming along when folks are spending even more money on spa rubdowns and facials once on board.
Fine jewelry and e-commerce seemed like a poor match until Blue Nile came around. Its specialty is diamond engagement rings, and you know you're doing something right if your website is soothing enough to sway a nervous fiance-to-be into making one of the costliest purchases in his life.
The recession has naturally been hard on the high-end jewelry market. It also only hurts that couples are putting off matrimony until the economy improves.
It's against this backdrop that Blue Nile is trading near its 52-week low, after missing Wall Street expectations in its latest quarter. It also hosed down its outlook. This isn't pretty, but if economy's turning you can feel the stampede of sweaty-palmed guys browsing through Blue Nile's interactive buying guide to nab the perfect ring.
Ruth's Hospitality Group
If casual dining is in a funk, just imagine how the ritzy chophouses are faring. Ruth's Hospitality is the company behind Ruth's Chris Steak House and Mitchell's Fish Market.
Upscale steakhouses smart during a recession on both fronts. Cash-strapped couples trade down to cheaper outings, and corporate powwows seem out of place when unemployment rates are spiking and companies are hacking away at expense reports.
Ruth's Hospitality is doing better than one may expect, though. Comps actually rose at its namesake chophouse in its latest quarter. With the exception of small losses during its seasonally sleepy third quarter, Ruth's attention to cost controls has kept profitability on the menu.
One of the hottest retailers this year has been lululemon athletica, a Canadian chain that sells high-end athletic apparel for women.
Net revenue soared 56% in its latest quarter, fueled by a 31% spike in comps. Earnings more than doubled. Yes, there's a real retailer putting out these kind of numbers, and it just sold your well-to-do aunt some smoking yoga pants.
We shouldn't be surprised that big-ticket items are already bouncing back -- as long as the wares are "in" fashionably.
Simon Property Group
Retailers are obvious magnets to disposable income, but why place a bet on a hot concept or two -- lululemon and Joe's notwithstanding. Buy the whole mall, instead.
Simon is the country's largest mall operator. Landlords benefit from the economic recover in two ways. First, you have rental income, and that's often calculated -- in part -- on tenant sales. The second way that mall operators thrive in recovery cycles is in heartier occupancy rates. Shops don't let leases expire when the cash registers are ringing.
Where do you want to be invested during an economic recovery? Share your thoughts in the comment box below.
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Longtime Fool contributor Rick Munarriz wonders if his contrarian heart will ever be happy. He does not own shares in any of the companies in this story, except for Joe's Jeans. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.