Wall Street has already moved on from the market’s impressive November run that saw the S&P 500 climb 11% and the Dow post its best month since 1987. Looking ahead, investors appear to have plenty of reasons to be bullish.
The positive vaccine news stole the show last month and the optimism finally helped extend the market’s rally outside of the usual suspects of tech firms and big retailers like Apple (AAPL Quick Quote) and Target (TGT) that have soared during the coronavirus. Investors are now hoping that the hard-hit areas such as energy and travel will be able to bounce back in 2021.
Meanwhile, the earnings outlook continues to improve for Q4 and beyond, and the U.S. economy continues to grow. Plus, the Fed is set to keep its interest rate near zero through at least 2023, which should provide a boost to stocks, as Wall Street lives in a constant state of there is no alternative.
That said, investors likely want to be on the hunt for stocks to add to their portfolios as we head into 2021. Yet, it might be prudent to find firms that were already growing and won’t need a vaccine for help. Today, we explore three highly-ranked Zacks stocks that fit the bill…
Winnebago Industries, Inc. (WGO)
Winnebago is an iconic American company that builds motorhomes, travel trailers, fifth wheel products, and boats under multiple brands, including its namesake, as well as Chris-Craft and others. The company is coming off a strong year and it might continue to benefit from people looking to travel in different ways during the coronavirus.
More importantly, Winnebago was growing well before the pandemic, having posted 60% growth in FY17 and 30% sales expansion in FY18. WGO did see its sales slip around 1% in FY19, but it bounced back in a big way, with its fiscal 2020 revenue up 19% to $2.4 billion.
The firm topped our Q4 estimates in October, ending FY20 on a high note. Zacks estimates call for its adjusted Q1 earnings to climb 37% on 26% stronger sales. Peeking further ahead, its FY21 revenue is set to surge 28% to hit $3.0 billion and help lift its adjusted EPS by 77%. Winnebago’s revenue and earnings are then projected to continue to grow in FY22. And WGO’s bottom-line revisions help it land a Zacks Rank #1 (Strong Buy) at the moment.
Winnebago holds an “A” grade for Growth in our Style Scores system and its Building Products-Mobile Homes and RV Builders industry rests in the top 2% of our over 250 Zacks industries. Plus, five out of the eight brokerage recommendations Zacks has for WGO come in at “Strong Buy” with one more at a “Buy.” And the company’s 0.85% dividend tops its industry’s 0.45% average.
WGO stock is up 20% during the last 12 months, against its industry’s 12% climb. Investors might be pleased to note that at $56 a share, WGO rests 20% off its 52-week highs, which could give it room to climb. And Winnebago shares have been heading in the right direction recently, up 15% in the last month to more than double its industry.
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