While technology stocks get numerous attention from the media, there are numerous attractive options in the patron goods space as well. Listed below are 4 stocks in that sector that I’d buy with none hesitation.
While often classified as a consumer goods stock, Amazon(NASDAQ: AMZN) is absolutely a mix of a consumer goods company and a technology company. It operates the biggest e-commerce and logistics company on this planet, where it sells each its own goods and people of third parties. This continues to be a steadily growing business, with its North American sales rising 9% last quarter and international sales up 12%.
Operating income for its retail businesses has been growing much more quickly, as the corporate has been using artificial intelligence (AI) to assist improve efficiency each inside its warehouses and on its delivery routes. It has also continued to see strong growth in higher-margin sponsored ads, off an already pretty large base.
Its largest business by profitability, though, is Amazon Web Services (AWS), its cloud computing business. It’s growing quickly, with revenue up 19% last quarter, as the corporate provides foundation models for AI and helps customers construct out their very own AI models and applications through its BedRock and SageMaker solutions. It’s currently the biggest cloud infrastructure company on this planet, holding a 31% share of that market.
Amazon has a protracted history of innovation and investing to win, and this ethos should help it proceed to be a long-term winner.
Image source: Getty Images.
Philip Morris International(NYSE: PM) is something rare — a growth stock in a defensive industry. Though it has no U.S. exposure in terms of traditional cigarettes, this a part of the corporate’s business remains to be growing through a mix of price increases and modest volume growth. Nonetheless, Philip Morris’ big growth driver has been its smokeless portfolio.
The corporate has seen huge growth from Zyn, a nicotine pouch made with nicotine powder and flavoring as an alternative of tobacco. Last quarter, sales for the product continued to surge, with volumes jumping nearly 44%. Meanwhile, its also seeing solid sales growth for its heated tobacco Iqos system, with volumes rising nearly 9% last quarter. Philip Morris bought back the Iqos license for the U.S. from Altria, and will look to introduce the product on a wider scale here next yr. It’s currently trying to get the newest version of the product approved by the FDA, while testing an older version in a couple of select U.S. cities.
One big positive for Philip Morris is that each Zyn and Iqos have considerably higher unit economics than traditional cigarettes. Management has said that within the U.S., Zyn’s product contribution level is 6 times greater than cigarettes, while the product contribution level for Iqos is least 2 times higher.
With strong volumes and higher unit economics for its smokeless products, Philip Morris is in a robust position.
While its stock had a down yr in 2024, e.l.f. Beauty(NYSE: ELF) has been an enormous winner the past five years — the stock is up greater than 650% over that stretch as of this writing. The corporate has taken tremendous market share within the mass cosmetics space within the U.S. the past few years. That could possibly be seen in its 40% year-over-year revenue growth last quarter.
E.l.f. has a robust following amongst younger consumers. It has successfully used a fast-follower product strategy of replicating popular prestige brand items at less expensive prices while using social media influencers to market its products. This has led to store shelf gains and higher product placements, all of which have fed into its gains.
Meanwhile, the corporate still has large opportunities within the skincare category, where is has a smaller presence, and in international markets. To this point, its moves in these areas have been successful.
Trading at a forward price-to-earnings ratio (P/E) of 27.7 times based on estimates for its fiscal 2026 (which ends March 2026) and a price/earnings-to-growth ratio (PEG ratio) of 0.52, e.l.f is an inexpensive growth stock.
JAKKS Pacific(NASDAQ: JAKK) made a giant upgrade in its executive suite a couple of years ago when it hired John L. Kimble as CFO following his stints at WaltDisney and Mattel. Meanwhile, over the past five years, the stock is up about 165% as of this writing.
Kimble has helped turn the toy company around and laid the groundwork for further solid performances. Nonetheless, the stock is one in every of the most affordable around, trading at a forward P/E of 6.5 and a PEG of under 0.3. Notably, it is also debt free.
A weak slate of youngsters movies hurt the stock in early 2024, however it could see a pleasant boost now that Moana 2 and Sonic 3 have landed on the box office. Each franchises have helped JAKKS toy sales previously, and each had very strong showings in theaters. Sonic 3 was one of the best performing movie of the franchise, while Moana 2 has grossed over $1 billion globally.
JAKKS has also been focused on making its non-licensed business larger, with a deal with evergreen content. It also previously signed a cope with Authentic Brands, owner of Roxy, Juicy Couture, Quiksilver, and other brands, to make items similar to beach accessories, skateboards, roller skates and other items that it began to roll out in the autumn of 2024.
With an improved box office slate, the Authentic Brands deals, and an inexpensive stock price, JAKKS Pacific in an under-the-radar stock to think about buying.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Geoffrey Seiler has positions in JAKKS Pacific, Philip Morris International, and e.l.f. Beauty. The Motley Idiot has positions in and recommends Amazon, Walt Disney, and e.l.f. Beauty. The Motley Idiot recommends Philip Morris International. The Motley Idiot has a disclosure policy.