Cheap Gas Could Give Consumers Up to $80 Billion This Year: 4 Stocks That Could Benefit

Investing

Published: March 7, 2016 8:25 am

Last Updated: January 13, 2020 12:18 pm

Face it, unless you live in California, it’s almost been a pleasure to go fill up your vehicle these days. With prices dipping as low as $1.25 in some areas, consumers are banking tons of extra cash, and there is a good chance that money will go elsewhere.

In a new research report, Jefferies analysts believe that consumers will save between $65 billion and $80 billion this year. The data also show that the individuals they surveyed are saving less and spending slightly more than they were a year ago, and they cited dining out, entertainment and shopping at retail stores as higher year over year. While paying down debt and adding to savings still leads the pack, there is still a lot of fresh cash headed toward discretionary spending.

The Jefferies team pointed to numerous companies that may benefit, but we picked four that are rated Buy at Jefferies.

Fogo de Chao

This had a hot summer initial public offering last year, and the stock has been cut in half since coming public. Fogo de Chao Inc. (NASDAQ: FOGO) is a leading Brazilian steakhouse, or churrascaria, which has specialized for more than 36 years in fire-roasting high-quality meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco.

Fogo delivers a distinctive and authentic Brazilian dining experience through the combination of high-quality Brazilian cuisine and a differentiated service model known as espeto corrido (Portuguese for “continuous service”) delivered by gaucho chefs. The Jefferies team loves the unique concept and feels like the stock has been hammered to some degree by issues in Brazil. With the business growing, new restaurants being opened, and the tough comparisons over, the stock offers tremendous value at current levels.

The Jefferies price target for the stock is $24, and the Thomson/First Call consensus price target is $20.33. Shares closed Friday at $16.12 apiece.