Growth stocks from the technology space gained galloping momentum last year spurred by individuals’ and businesses’ dependence on digital platforms to stay connected amid pandemic lockdown conditions. And though the current economic recovery is driving a sell-off of stocks that were “pandemic winners” as investors shift to value stocks, we believe budding non-technology growth stocks Camping World (CWH), Dillard’s (DDS), and Olympic Steel (ZEUS) have the potential to outperform broader markets in the near term. 

Technology industry growth stocks have experienced a powerful rally over the past year. However, most of the stocks that benefited from the pandemic’s disruptions have been witnessing selling off lately.

The slowly building economic recovery is motivating investors to rotate away from the pricey “pandemic winners” into  undervalued cyclical stocks. But economic the recovery is also leading to the emergence of a new set of stocks that are equipped to grow in the post-pandemic world.

Budding stocks, such as Camping World Holdings, Inc. (CWH - Get Rating), Dillard’s, Inc. (DDS - Get Rating), and Olympic Steel, Inc. (ZEUS - Get Rating), possess solid growth attributes and have the potential to deliver solid returns in the near-term. Because their industries are gradually returning to their pre-pandemic operational levels, we think these stocks have the potential to capitalize on the recovery.

Camping World Holdings, Inc. (CWH - Get Rating)

CWH is a recreational vehicle (RV) and outdoor retailer. The company operates through two segments—Good Sam Services and Plans, and RV and Outdoor Retail. In addition to offering outdoor and active sports products, it provides RV maintenance and repair services, emergency roadside assistance plans, and property and casualty insurance programs. CWH serves customers through dealerships, and online and e-commerce platforms.

On April 1,CWH acquired approximately nine acres of land off Interstate 80 in Cheyenne, Wyo., to build its  first SuperCenter facility in the state. Set to open in late 2021/early 2022, the SuperCenter will include a wide range of new and used RVs from top manufacturers in addition to a full assortment of RV and outdoor products and accessories and other product portfolios.

CWH  signed an agreement to acquire multi-location Hilltop RV Superstore on March 31. The company will expand its market reach in Michigan through the dealerships in Escanaba and Ishpeming. It  has also signed various agreements to acquire dealerships in many states.

CWH is scheduled to release its fiscal 2021 first quarter financial results on May 4. Its total revenue increased 17.5% year-over-year to $1.13 billion for the fourth quarter, ended December 31, 2020. Its gross profit has increased 57.1% year-over-year to $378.03 million. CWH’s adjusted net income came in at $20.73 million, compared to a net loss of $13.18 million in the fourth quarter of 2019. Its adjusted EPS was $0.48, compared to a loss per share of $0.35 in the prior-year period.

A $1.86 consensus EPS estimate for the current quarter, ending June 30, 2021,represents an improvement of 14.8% year-over-year. CWH surpassed the consensus EPS estimates in each of the trailing four quarters. The $1.91 billion consensus revenue estimate  for the current quarter represents a 19% gain on a year-over-year basis. The stock has gained 435.4% over the past year and closed yesterday’s trading session at $40.53.

CWH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

The stock has an A grade for Value and Momentum, and a B grade for Quality and Growth. We have also graded CWH for Stability and Sentiment. Click here to access all CWH’s ratings.

CWH is ranked #6 of 33 stocks in the A-rated Athletics & Recreation industry.

Dillard’s, Inc. (DDS - Get Rating)

DDS retails  fashion apparel, cosmetics, and home furnishings, and other consumer goods. The company operates through two segments—Retail Operations and Construction. Its  Construction segment constructs and remodels stores through CDI Contractors, LLC.

On February 26, 2021, DDS announced a cash dividend of $0.15 per share on the company’s Class A and Class B Common Stock, payable on May 3, 2021.

On February 25, DDS, in collaboration with Atlanta-based tastemaker, Emily Hertz, launched a new limited-edition capsule collection called ‘Born on Fifth for Antonio Melani’. DDS and New York-based designer duo, Michael and Alex Toccin, have launched a new brand named LDT that offers a fresh take on American fashion with the powerfully feminine style of both the ’60s and ’90s. The company seeks to drive fashion excitement and brand awareness through these collaborations and by so doing  attract new clients.

For the fourth quarter ended January 30, 2021, DDS’ net sales came in at $1.57 billion, which represented an improvement of 53.2% sequentially. The company’s cost of sales had decreased 19.8% year-over-year to $1.08 billion. Its net income came in at $67 million, up 110% sequentially. Also, its EPS increased 113.3% sequentially to $3.05 for the quarter.

For the current quarter, ending April 30, 2021, analysts expect DDS’ EPS to be $1.54 billion, representing a 122.2% improvement  year-over-year. Analysts expect the stock’s revenue to be $1.27 billion, up 54.1% from the prior-year period. It has surpassed the Street’s consensus EPS estimates in three of the trailing four quarters. DDS has gained 343.4% over the past year and 305.2% over the past nine months. It closed yesterday’s trading session at $99.77.

It’s no surprise that DDS has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has a B grade for Growth, Value, and Quality. Click here to see the additional ratings for DDS (Stability, Momentum, and Sentiment).

DDS is ranked #17 of 66 stocks in the B-rated Fashion & Luxury industry.

Olympic Steel, Inc. (ZEUS - Get Rating)

ZEUS processes and distributes metal products in the United States and internationally. The company operates through three segments: carbon flat products, specialty metals flat products, and tubular and pipe products. Its Chicago Tube and Iron (CTI) subsidiary is a leading distributor of steel tubing, bar, pipe, valves and fittings, and fabricates pressure parts for the electric utility industry.

On March 15, ZEUS paid a regular quarterly cash dividend of $0.02. And in December, it acquired the assets of Action Stainless & Alloys, Inc. The transaction marked ZEUS’ fourth acquisition within  the past three years. Through the acquisition, ZEUS hopes to expand the geographical footprint of its specialty metals business and provide additional product and processing offerings to customers.

ZEUS is scheduled to announce its fiscal 2021 first quarter results on May 7, before the market opens. Its net sales have increased 3.7% year-over-year to $331.55 million for the fourth quarter, ended December 31, 2020. ZEUS’ operating income came in at $5.37 million, up more than 429% year-over-year. Its net income was $1.79 million, compared to a net loss of $0.89 million in the fourth quarter of 2019. Its non-GAAP EPS came in at $0.14 compared to a loss per share of $0.23 in the year-ago period.

Analysts expect the stock’s EPS to improve 314.3% for the current quarter, ending June 30, 2021, to $0.75. It has achieved and surpassed  consensus EPS estimates in three of the trailing four quarters. And its $462.57 million consensus revenue estimate for the current quarter represents an 86.3% rise on a year-over-year basis. Analysts expect the company’s EPS to grow at 34.3% per annum over the next five years.

The stock has gained 244% over the past year and 170.2% over the past nine months. It closed yesterday’s trading session at $26.82.

ZEUS’ POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system.

The stock has a B grade for Growth, Momentum, Value, and Quality. In addition to the POWR Ratings grades we’ve just highlighted; one can see ZEUS’ ratings for Sentiment and Stability here.

ZEUS is ranked #9 of 34 stocks in the A-rated Steel industry.

CWH shares rose $0.03 (+0.07%) in after-hours trading Friday. Year-to-date, CWH has gained 66.32%, versus a 11.83% rise in the benchmark S&P 500 index during the same period.