Underpinned by a flood of stimulus measures and successful COVID-19 vaccine rollouts, stocks on Wall Street resumed their march higher in recent days, with the S&P 500 nearing the 4,100-mark for the first time in history.
Driven by signs of a strong economic rebound, investors have increasingly piled into ‘reopening stocks’ during the recent rally. Taking that into account, here are three names which are well-positioned to extend their march higher in the weeks ahead amid growing optimism over the economic outlook.
1. Dave & Buster's Entertainment
Year-To-Date Performance: +49.1%
Restaurant-and-video arcade business Dave & Buster’s (NASDAQ:PLAY) is likely to benefit from the booming economic recovery as diners head back to its stores in greater numbers amid the emergent return to normalcy.
Shares of the Dallas, Texas-based dining-and-entertainment venue operator, which has 133 locations across the U.S., have easily outperformed the broader market over the past year, gaining 870% since falling to an all-time low of $4.61 in March 2020. Year-to-date, shares have climbed nearly 50%.
PLAY stock, which jumped to a pre-pandemic high of $51.73 on Mar. 26, ended Tuesday’s session at $44.78, earning it a valuation of roughly $2.3 billion.
Dave & Buster’s reported a smaller than expected loss when it released fourth quarter financial results last week, thanks to steadily improving sales at its reopened stores.
The gaming and restaurant chain said it lost $1.19 per share, a steep decline from earnings per share of $0.80 in the year-ago period, but still better than consensus estimates for a loss of $1.25 per share.
Revenue meanwhile clocked in at $116.8 million, easily topping forecasts for sales of $101.7 million, as consumers seeking a social-dining experience flocked back to its locations.
Indeed, the arcade-dining operator said that sales at fully running comparable stores during the first eight weeks of Q1 marked the "strongest performance" since the pandemic started about one year ago.
That trend is likely to continue in the near-term, as fears surrounding the virus continue to abate, considering the progress being made on the vaccine front.
Honorable mentions: Darden Restaurants (NYSE:DRI), Cheesecake Factory (NASDAQ:CAKE), Texas Roadhouse (NASDAQ:TXRH)
2. Southwest Airlines
Year-To-Date Performance: +37.5%
Perhaps one of the best stocks to buy for investors who want to play the ongoing rebound in domestic travel demand is low-cost carrier Southwest Airlines (NYSE:LUV).
Data provided from the Transportation Security Administration (TSA) showed that nearly five million people were screened at airport checkpoints across the country during Easter weekend, the highest number to travel over a weekend since March 2020.
The Centers for Disease Control and Prevention (CDC) updated its domestic travel guidance last week, announcing that those who are fully vaccinated against COVID-19 can travel in the U.S. without having to get tested or self-quarantine.
The positive news could mean domestic air-travel will improve at an even quicker pace as we approach the summer months, which should bode well for Southwest.
Shares of the Dallas, Texas-based airline company, which carries more domestic passengers than any other U.S. airline, have made an impressive recovery from the lows reached during their coronavirus-related selloff last year, rebounding 185%.
LUV stock, which is up 37.5% so far in 2021, closed at a fresh three-year peak of $64.10 last night. At current levels, Southwest has a market cap of $37.7 billion, making it the most valuable U.S. airliner, ahead of Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL), and American Airlines (NASDAQ:AAL).
The company next reports financial results on Thursday, Apr. 29 before markets open. Consensus calls for a first quarter loss of $1.88 per share, while revenue is forecast to total $2.05 billion.
Honorable mentions: JetBlue Airways (NASDAQ:JBLU), Spirit Airlines (NYSE:SAVE), Mesa Air Group (NASDAQ:MESA)
3. Simon Property Group
Year-To-Date Performance: +36.6%
Despite the accelerated shift to e-commerce and online shopping amid the coronavirus pandemic, the death of the shopping mall experience has been greatly exaggerated.
In a promising sign, many states across the country have eased restrictions on mall and shopping center operators, allowing consumers to enjoy an in-person social shopping experience once again.
Considering the reopening of the economy and potential pickup in consumer spending, one of the premier names to capitalize on the recovery is Simon Property Group (NYSE:SPG), the largest shopping mall owner in the U.S.
Shares of the Indianapolis, Indiana-based real estate company, which owns roughly 200 malls and outlet centers in the U.S., have gotten off to a strong start to the year, climbing more than 36% in 2021.
SPG stock—which has soared 175% over the last 12 months—settled at $116.49 yesterday, not far from a 52-week high of $121.92 reached on Mar. 15. At current levels, the company has a market cap of $37.7 billion.
Simon Property is scheduled to report first quarter financial results on Monday, May 10 after the closing bell.
Beyond the top- and- bottom-line numbers, investors will pay close attention to comments from management regarding their outlook for the rest of the year and beyond.
In the company’s Q4 earnings report released in February, CEO David Simon sounded upbeat on the year ahead, saying tenants are in a better position to pay their rent on time and some retailers are even starting to think about opening new stores in its malls. "We feel confident we have turned the corner, and we expect growth in earnings and cash flow in 2021," Simon added.
Honorable mentions: Regency Centers (NASDAQ:REG), Tanger Factory Outlet Centers (NYSE:SKT), Brixmor Property Group (NYSE:BRX)