The negative roar of the crowd is starting to sound like that bear that rips apart Leonardo DiCaprio in the “The Revenant.” The worse the selling seems to get, the more shrill the call. We are being told it’s just like 2008, and it may be like the crash like 1929. The fact of the matter is that the leading economic indicators have yet to turn negative, and the bottom line is the 2008-type problem now lies in the energy industry, not with the U.S. consumer.

In some new research reports, Jefferies makes the case that not only is this nothing like 2008, the firm also notes that the falling oil and then in turn overall energy costs are a huge boon to the U.S. consumer. With consumer purchasing almost 70% of gross domestic product, and prices across the board not exploding, consumption should stay solid.

We screened the Jefferies research data base for stocks that should excel in a consumption environment. All four are rated Buy.

Activision Blizzard

This company reported outstanding third-quarter earnings, made a huge acquisition and is a franchise pick at Jefferies. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide.

The company develops and publishes interactive entertainment software products through retail channels or digital downloads, as well as downloadable content to a range of gamers. The Call of Duty franchise has propelled earnings for this industry powerhouse for years, and “Call of Duty: Black Ops 3” came out just in time for the holidays. It was one of the top-selling games over the three-day Black Friday and Christmas selling periods.

The big news last fall was the company’s purchase of Candy Crush saga creator King Digital Entertainment. Most of Wall Street thinks the buy is an outstanding move for the company, and specifically the synergies between the two companies is cited. Many analysts feel that the key to unlocking some monster value is creating and cross-promoting the Activision product inside the King Digital mobile distribution network.

Some on Wall Street feel the guidance Activision gave when it last reported is very conservative. They also think the content it will release in 2016 is outstanding and not fully reflected in the guidance. The growth in the most recent quarter was particularly impressive given two challenges: the strong dollar and unfavorable comparisons to the prior year quarter. Much of that growth was fueled by Destiny, Heroes of the Storm and Hearthstone, which now have 70 million registered players combined. The three titles have generated over $1.25 billion in non-GAAP revenues to date.

The analysts don’t expect much AAA virtual reality product from the company until 2017, as many of the controls have to be rethought. With that in mind, Activision will be a leader.

Investors receive a 0.6% dividend. The Jefferies price target for the stock is $47. The Thomson/First Call consensus price target is $42.01. The stock closed Friday at $34.91.

Coach

This consumer discretionary stock is fighting its way back after getting annihilated last year. Coach Inc. (NYSE: COH) is a leading New York design house of modern luxury accessories and lifestyle brands. The Coach brand was established in New York City in 1941 and has a rich heritage of pairing exceptional leathers and materials with innovative design.

Coach products are sold worldwide through Coach stores, select department stores and specialty stores, and through company’s website. In 2015, Coach acquired Stuart Weitzman, a global leader in designer footwear, sold in more than 70 countries.

The stock was a favorite for years before getting absolutely hammered in 2015. Many analysts around Wall Street have upgraded the company recently. Jefferies notes that many of the headwinds the company faced last year should dissipate in 2016, and the holiday season seems to have been right on track.

Coach investors receive an outstanding 4.25% dividend. The Jefferies price objective is a whopping $50, and the consensus target is lower at $37.42. The shares closed Friday at $31.43.
McDonald’s

The fast-food giant has been on fire over the past six months, but it still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global food-service retailer with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business men and women.

Jefferies, like many, is very pleased with the efforts from new CEO Stephen Easterbrook. He is taken the bull by the horns with a strategic corporate reset by changing the menu, updating the hours breakfast is served and modernizing the restaurants. Management prioritized that dividend growth is a key element of its shareholder value proposition. McDonald’s has increased its dividend every year for the past 39 years.

McDonald’s investors receive a 3.09% dividend. Jefferies has a $125 price target. The consensus target is $120.65. The stock closed Friday at $115.18.

PayPal

This company was spun-off from eBay last year and many on Wall Street think the real growth is in the payment sector. PayPal Holdings Inc. (NASDAQ: PYPL) operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide.

PayPal enables businesses of various sizes to accept payments from merchant websites, mobile devices and applications, as well as at offline retail locations through a range of payment solutions across company’s payments platform, including PayPal, PayPal Credit, Venmo and Braintree products. The company’s platform allows customers to pay and get paid, withdraw funds to their bank accounts and hold balances in their accounts in various currencies.

Jefferies thinks that solid revenue growth over the next five years is possible and the scarcity value, or lack of competition, could help drive the multiple for the company. Some Wall Street analysts have pointed to the new acquisitions PayPal has made like Venmo and Paydiant that are leveragable with the combination of Paydiant. Many also think that the eBay separation is likely to help the company’s positioning with large merchants.

Jefferies analysts noted that while the company only reported in-line numbers and guidance its first time out, the strong secular growth in the payments industry and improved operating margins make the stock a solid buy. They also note that they are not overly concerned about Apple’s recent announcement of its entry into this already crowded market, especially given Venmo’s entrenched user base and its social media component.

The $44 Jefferies price target is higher than the consensus target of $41.03. Shares closed on Friday at $32.31.

All these companies deal directly with the U.S. consumer, and increased money in the pocket from lower oil prices is a boon to everybody, regardless of financial status. If you need any reminding, next time you fill up at the pump, try to remember what that price was two to three years ago.

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