Chris Versace weighed in on his self-described “Living the Life” stock category on Real Money this week. His takeaway? With legions of Americans out and about after pandemic restrictions lifted, clean and beautiful are the watchwords for investors.
Versace especially views hygiene and beauty stocks as a natural, given the propensity for cash-flush consumers to return to normal grooming standards after the COVID shutdowns.
Versace writes in a recent Real Money column: “The combination of stimulus checks and the reopening have led to a boom in consumer spending and a likely shift from repair and remodel spending to updated wardrobes and refreshing their appearance. That means the snapping up of affordable and not-so-affordable luxury apparel as well as cosmetics and fragrances. I see this as part of a spending surge for what I call my Living the Life investment theme and its intersection with my Cleaner Living investment theme. Let's break it down and discuss a few ways investors can play this.”
Versace cites data showing cosmetic and fragrance sales are way up from last year, and spotlights Ulta Beauty (ULTA) - Get Ulta Beauty Inc Report and its fresh quarterly results, which showed comp-store sales popping by 65.9% year-over-year with "the relaxation of restrictions, increasing consumer confidence and a desire for newness... positively impacting consumer spending in the beauty category."
Read more on Real Money about what Versace thinks of other stocks in this group that are poised to profit, from Estee Lauder (EL) - Get Estee Lauder Companies Inc. Class A Report to LVMH Moet Hennessy Louis Vuitton (LVMUY) .
“Coty embracing aspects of my Digital Lifestyle investing theme that has it tapping into digital commerce. Coty also fits my Rise of the New Middle Class investing theme as it looks to tap into rising disposable income in Asia and China in particular.”