Don’t let the noise of Tuesday’s presidential election deter your spirits as an investor. Despite the back-and-forth going on between President Donald Trump and former Vice President Joe Biden right now, there are plenty of stocks that will do just fine no matter who’s in the White House come Jan. 20.
Trex (NYSE:TREX), Tractor Supply (NASDAQ:TSCO), and Costco (NASDAQ:COST) are going to be just fine no matter how the drama plays out. Let’s go over why these three high-flying stocks can keep going even higher in the coming months.
The pandemic finds us staying home a lot more than we used to in the past, and the ease of COVID-19 spread indoors finds a lot of us expanding our outdoor entertaining options. Trex — the undisputed top dog of wood-alternative decking that lasts longer than wood and is far easier to maintain — was doing fine before, but now it’s also a major beneficiary of homeowners looking to expand their outdoor living space.
Consolidated net sales climbed 19% in the company’s latest quarter and are up 12% through the first nine months of the year. Demand is healthy, and Trex expects strong double-digit growth in 2021.
Trex is at the intersection of a lot of favorable trends that will help keep its eco-friendly product moving. The suburbanization trend is picking up speed in the pandemic, as folks flee from metropolitan high-rises to actual homes in the suburbs. Less than a quarter of the homes out there currently have an outdoor deck, so Trex is going to be busy extending the outdoor living spaces of new homeowners and replacing the abandoned splintered wood decks out there.
Until we lick this pandemic, it doesn’t matter who’s in the White House. We’re still going to want to have guests come over to entertain, and we’re going to want to do it outside where it’s scientifically safer. With Trex reinitiating its share-buyback program despite the stock hitting new highs, you have to feel that Trex knows that better times are ahead.
Going hand in hand with the suburbanization trend, Tractor Supply is a growing specialty retailer catering to the hobby farm or recreational farming market. It provides framing tools, pet feed, and other livestock supplies to folks moving into rural areas to live off the land.
Net sales soared 31% in its latest quarter, fueled by a 26.8% upward burst in comps. The scalable business saw its bottom line growing even faster, up 59% to hit $1.62 a share. Results were well ahead of Wall Street targets, and Tractor Supply’s guidance was also ahead of market expectations.
It’s easy to see more people embracing the call of the country following this election, and with Tractor Supply rolling, it’s hard to see the good times ending anytime soon. If you’re going to work the land, Tractor Supply is there with a helping hand.
Instead of dividing the country into two political camps, I prefer to sort my fellow Americans into two groups: Costco fans and folks who have never set foot in the warehouse club. Costco is the leading operator of warehouse clubs with 800 locations worldwide. It’s a master at turning over its inventory and keeping costs in check. It passes on the savings to its shoppers, who don’t mind paying for club memberships. Don’t worry about Biden’s push for bumping minimum starting wages to $15 an hour. Costco’s been there since last year.
Costco obviously has been a rock star through the pandemic. It never had to close as an essential goods retailer, and it became the obvious place to shop when folks were stocking up in bulk to avoid making too many trips to grocery stores and other retail outlets.
Costco is also holding up quite nicely now that most retailers are open across the country. Adjusted comps rose 14.1% in the fiscal fourth quarter that ended in August, and the momentum remains strong. Comps climbed 15.5% in September, and the company just posted a 14.4% increase for October. With resilient in-store traffic and online sales nearly doubling, Costco has proven itself to be the quintessential all-weather retail concept.