Activities during the summer are vastly different than those that take place during other seasons. Therefore, it is only natural that certain industries should see boosts in their stocks during this season. Although this summer will likely deviate quite a bit from the norm, there are three opportunities that present themselves to investors.
Taking advantage of family outings
In a previous article, I’d outlined reasons why BRP should see a boost in revenue this summer. Due to the nationwide closures, there are so few activities that families can do this summer. One of the options families have is to spend time outdoors, what better place to get equipment to do that than Canadian Tire (TSX:CTC.A)?
This is a company that needs no introduction. Canadian Tire is a leading retailer in the country, with its reach being felt from coast to coast. Canadian Tire offers everything needed from landscaping, camping, fishing, home repairs, barbecues, and so much more. If there is something that can be done outdoors, you can rest assured that going to Canadian Tire is a prerequisite.
The company has done well in accommodating customers and employees throughout the COVID-19 pandemic, from providing personal protective equipment, installing protective barriers, and instituting curbside pickup. As summer activities ramp up in the coming months, Canadian Tire is in position to be a beneficiary.
A boost in auto repairs
It is unfortunate, but there tend to be more car accidents during the summer. In fact, in Canada, about 20% of all accidents happen in July and August. This tends to happen because the hot temperatures during the day can lead to increased driver fatigue. Because of this, companies such as Boyd Group (TSX:BYD.UN) should see increased revenues during this season.
Boyd has been one of the fastest-growing companies in the country over the past couple years. The company plans to continue accelerating this growth by expanding aggressively through new store locations and acquisitions. Management has been aiming for an annualized growth rate of 15%, however the company has actually done much better with revenue growing by an annualized rate of 27% over the past decade.
Although not the most glamorous of growth stocks, this company still has a lot of room for growth. The summer season is generally very good business for its industry, and the COVID-19 pandemic has offered a prime opportunity, knocking the stock off its previous all-time highs.
Major league sports are on the verge of continuing their seasons
On March 11, the National Basketball Association made headlines by being the first major sports league to suspend operations due to the COVID-19 pandemic. This started a chain reaction with the National Hockey League, Major League Soccer, and Major League Baseball all following suit the next day. By the end of the week, professional sports were suspended worldwide.
Now with major sports leagues scheduled to return as early as June 17 (e.g., English Premier League), Score Media and Gaming (TSXV:SCR) is looking like an excellent investment opportunity. The company has many different business segments: theScore (its mobile sports app, which provides statistics, news, and highlights), theScore Bet (its sportsbook, which was first offered in late 2019), and theScore esports (a platform which provides news on competitive video games and players).
Score Media stock has already more than doubled since the market bottom in March, and it has seen an even further boost recently, as sports leagues have continued preparing to resume. However, the company is still a small-cap stock. In addition, its sportsbook offering did not have much runway before leagues started shutting down earlier this year, which means investors never got a real chance to assess how its addition affected the company’s top line. This is a company that still has a lot of room for growth.
The COVID-19 pandemic has certainly caused this summer to differ from previous summers in a big way. However, there are still many activities than can be done during the closures, the auto repair industry will see a boost in sales, and the opening of major sports leagues should ignite further investor interest. These three companies all look great from a long-term point of view, but this summer could be very interesting to watch as well.
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Fool contributor Jed Lloren has no position in any of the stocks mentioned.