The final month of the year promises to be as wild as every month before in this unprecedented year. Between the pandemic and the recession, there are plenty of moving parts. The year doesnt have to end badly, though, especially if you buy into the right stocks.
DraftKings (NASDAQ:DKNG), Peloton (NASDAQ:PTON), and Sirius XM Radio (NASDAQ:SIRI) are three stocks that are ready to make the most of the holiday season. Lets review why these three companies are names worth watching -- and buying -- in December.
Image source: Getty Images.
It may seem hard to believe, but were now less than three weeks away from the start of the new NBA season. A lot of sports leagues have had to reshuffle their schedules, but as we now know, the game must go on.
DraftKings is a leader in the booming fantasy sports market. Pro forma revenue soared 42% in its latest quarter. There are now more than 1 million monthly unique paying customers enhancing their armchair quarterbacking prowess through DraftKings, a 64% year-over-year surge.
DraftKings also runs a more conventional sportsbook, and thats what makes its approach so potent. Major networks, sporting events, and even individual teams invite DraftKings in for the fantasy sports angle. Earlier this week, the Detroit Pistons became the latest team to announce a deal making DraftKings its exclusive fantasy sports provider. DraftKings now has a foot in the door of sports enthusiasts. Just wait until you see whats possible when it gets the rest of its body in there.
Investors dont seem to get that Peloton is more than just a pandemic play. The maker of high-end treadmills and stationary bikes is trading nearly 20% below the all-time high it set two months ago, and was one of the stocks to initially retreat on positive vaccination news.
The fear here is that folks will flock back to the gyms and spinning-class boutiques when the coast is clear, but thats not going to happen. Were not pedaling in reverse now that weve had a taste of the interactive workouts available through Peloton.
Revenue soared 232% in its latest quarter. It had 1.33 million connected fitness subscribers at the end of September, a 137% pop over the past year. The digital memberships available for folks who dont own Peloton gear is growing even faster. These bikes and treads are getting put to good use. The average connected fitness subscriber completed 20.7 workouts a month, the companys second-most active showing ever on that front.
Even with a vaccine likely making life safe at the fitness center at some point in 2021, folks arent making these big investments on hardware that will collect cobwebs. Peloton cant keep up with its large backlog of orders and will be a hot big-ticket holiday purchase this month.
Sirius XM Satellite Radio
Dont sleep on the satellite-radio monopoly this month. There are a couple of things that could get Sirius XM moving again, and thats a good thing since the shares have an impressive streak thats about to end unless it can close out 2020 on a strong note. After 11 consecutive years of delivering positive returns to its shareholders, Sirius XM was trading 9% lower year to date through Thursdays close.
One thing that can get the stock moving is a strong close to 2020 in terms of car sales. Sirius XM posted a rare decline in quarterly revenue earlier this year during the shelter-in-place phase of the pandemic. Revenue turned positive in the third quarter, earlier than analysts were expecting. Recent deals for Pandora and podcast-darling Stitcher help wean it somewhat from the ups and downs of auto sales, but an uptick in driving and showroom activity can only help.
Sirius XM should also finalize contract negotiations this month to keep Howard Stern on its airwaves. The company has had quite the transformation over the past decade -- going from penny stock to the king of all media stocks -- but it has some uphill climbing to do if it wants to end 2020 with a 12-year winning streak.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.Rick Munarriz owns shares of Peloton Interactive and Sirius XM Radio. The Motley Fool owns shares of and recommends Peloton Interactive. The Motley Fool recommends Sirius XM Radio. The Motley Fool has a disclosure policy.
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