3 growth stocks ready to bounce off the bottom
Despite the fact that this year so far has been a growth year for the markets, there are still some stocks that are not participating in this growth. It doesn't necessarily spell the end for them, but it's a great place for investors to think about what's behind it. Some companies may not be doing entirely well this year or are dealing with temporary issues that may subside over time. We'll take a look at 3 such stocks now.
1. Chewy $CHWY-0.2%
Chewy is one of the largest online pet product stores in the US. It offers a wide range of goods including food, treats, vitamins, medicines, clothing, toys, crates and many other items for dogs, cats, birds, rodents, fish and other pets.
In addition to selling pet supplies, Chewy also strives to provide customer support and advice. It has a team of experts who are ready to help customers with their questions and problems regarding pet care and choosing the right products.
Chewy, Inc.
CHWYIn 2020, Chewy was acquired by PetSmart, another major player in the pet goods market. However, Chewy continues to operate as a standalone brand and continues to sell online to customers across the United States.
In late May, Chewy reported surprisingly strong sales growth and record subscriptions to its Autoship service despite price increases. Sales growth accelerated to 14% and Chewy's adjusted profit margin rose to 4% of sales from 2.5% a year ago.
Chewy shares are well below their all-time highs, even after a slight recovery in recent weeks. Pet owners have cut back on spending over the past year or so, contributing to a 1% year-over-year decline in Chewy's customer base. However, the business' best growth days are still ahead.
2 Garmin $GRMN+0.4%
Garmin is a U.S.-based international company that specializes in the manufacture and development of navigation devices and technologies for athletes, outdoor activities, aviation, marine navigation and more.
Over the years, Garmin has expanded into other areas, including sports watches, cycling computers, fitness trackers, and other devices for tracking and monitoring health and performance. Garmin also offers software and apps for data and workout management.
Garmin Ltd.
GRMNToday, Garmin offers a wide range of products. Garmin is one of the world's leading manufacturers of navigation technology and has a strong market position.
A reduction in demand for parts of its technology product portfolio has led to unusually weak recent results for Garmin. Revenues in the latest quarter fell 2% year-on-year and profitability declined.
However, Garmin still enjoys some of the strongest profit margins in the industry, with operating income exceeding 17% of sales. It also has abroad product portfolio, ranging from premium wearables to full-fledgedaircraft navigation platforms. This depth provides valuable stability when some sectors are not performing so well.
3. Etsy $ETSY+1.2%
On the Etsy platform, sellers can set up their own shops and offer handmade products such as jewelry, clothing, home decor, ceramics, artwork, and more. Customers can then browse, shop and interact directly with sellers.
Etsy also provides a vintage (antiques) category where one can find older products with character such as clothing, accessories, furniture and collectible pieces.
Etsy, Inc.
ETSYThe company reported a 5% year-over-year decline in sales volume in the first quarter. However, total sales jumped 11% year-over-year, thanks in part to rising dealer fees. Etsy also returned to growth in its core buyer metric.
Etsy is improving its browsing, search and managementfeatures. All of this will make the platform more valuable to buyers and sellers. Meanwhile, the prospect of an ever-expanding portfolio of buyer services should allow their earnings to increase over time.
This is not financial advice. I am providing publicly available data and sharing my views on how I would handle the situations myself. Investing is risky and everyone is responsible for their decisions.
