The prices in the stock market are continuously changing, and the main effective factors are the performance and profitability of the respective companies.
Therefore, investors involved in stock trading will closely monitor recent earnings reports, dividend announcements, and performance forecasts, amongst other fundamental factors.
Investors should be using an economic calendar to fortify their strategy and predictions. With this in mind, let’s take a look at the top stocks to buy right now and the performance of the relative businesses.
Costco Wholesale Corp (COST)
The American multinational corporation is the fifth largest retailer in the world (as of 2020), and has performed strongly on the stock market recently. Its bullish spike can be accredited to the fact that earnings rose by 7% compared to last year, at $3.09 a share — surpassing analysts’ estimations of $3.58 a share. Further exceeding expectations, the company’s revenue, including membership fees, rose by 17% to around $62 billion, totaling an annual revenue of nearly $200 billion.
This success has come as the public continues to shop in-store after the effects of the pandemic, and Costco in particular, saw rising foot fall throughout June, July, and August this year. It appears they have maintained the foundations laid during the pandemic, where the stores were stormed by customers stocking up on groceries. Despite the easing of restrictions and lockdowns, Costco has managed to sustain their popularity.
The automatic renewals of its memberships also contributed to the increase in revenue, with the successful system of premium and executive tiers. Costco increased its memberships by a further 1 million customers in the fourth quarter, which meant membership fees provided an impressive $1.2 billion.
Although it seems a worthy investment at the moment, stock traders should be wary of supply chain issues that the industry is experiencing. Costco has managed to overcome the bottlenecks of ocean freights and lack of truck drivers so far. In addition, Costco has increased lead times for orders to relieve some of the stress in terms of increasing shipping container costs.
The corporation’s advantage is scale, meaning it is likely that Costco can continue to navigate the challenges. This will help draw in more customers and grow its group of returning satisfied members, perhaps more so than its peers.
Mercado Libre Inc (MELI)
Moving away from in-store, another retail stock that is performing well is Mercado Libre, a giant in the online sector. Mercado Libre is the largest provider of eCommerce services in Latin America, operating in 18 countries, and even outperformed the behemoth of Amazon (AMZN) on some occasions in this part of the world.
The corporation has continued to expand, providing an eCommerce marketplace for buyers and sellers, platforms for users to create online stores, and financial services technology. As of August 2021, the Brazilian part of the enterprise acquired São Paulo-based logistics company, Kangu. This has increased its delivery service points by 5,000 and has spread over 700 cities in Brazil, Mexico and Colombia. Although Kangu will remain an independent logistics company, its collaboration with Mercado Libre aims to increase the efficiency of the delivery operations.
As an all-encompassing company, Mercado Libre’s eCommerce sales rose to $1.14 billion in the second quarter, whilst the revenue from the financial tech services grew to $560.4 million. The numbers continue to impress, as the active users are up by 47%, with a total of 75.9 million.
Despite market volatility, eCommerce stocks, in particular, have performed well, as more and more customers turn to online shopping — an effect of the pandemic that has seemed to change buying habits and is unlikely to be changing anytime soon.
Snap Inc (SNAP)
Famously known for its social media platform, Snap is continually evolving and developing its technological products and services. However, its bullish signs can be surmised from its stock market performance alone, and not necessarily the company’s earnings report. In fact, analysts suspect that Snap will incur a loss on annual revenue.
Despite this, the number of daily active users increased by 55 million, totaling 293 million — above the estimation of 290 million. The company’s value also looks promising, with the increasing trend of large consumer brands investing in digital advertising on Snap’s social media platform.
With well-performing stocks like these, there is the potential for rewarding opportunities. However, like with any investment, it does also pose its risks. So, it is imperative to carry out extensive research surrounding the stock market and the relevant companies. From there, you can form a trading strategy that can increase your chances of a profitable return.