Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. But they’re also double-edged swords as they often lag in booming conditions, and this pattern has persisted recently. Over the past six months, the industry has recorded a loss of 7.9%, a far cry from the S&P 500’s 6.7% ascent.
Investors should tread carefully as the low switching costs for everyday products mean that not all businesses are created equal. On that note, here are three consumer stocks we’re passing on.
Market Cap: $12.12 billion
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Do We Pass on CAG?
At $25.40 per share, Conagra trades at 9.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than CAG.
Market Cap: $28.44 billion
With Corn Flakes as its first and most iconic product, Kellanova (NYSE:K) is a packaged foods company that is dominant in the cereal and snack categories.
Why Are We Hesitant About K?
Kellanova is trading at $82.80 per share, or 21x forward price-to-earnings. Read our free research report to see why you should think twice about including K in your portfolio, it’s free.
Market Cap: $665.7 million
Committed to clean-label foods, SunOpta (NASDAQ:STKL) is a sustainability-focused food and beverage company specializing in the sourcing, processing, and packaging of organic products.
Why Does STKL Give Us Pause?
SunOpta’s stock price of $5.47 implies a valuation ratio of 21.5x forward price-to-earnings. If you’re considering STKL for your portfolio, see our FREE research report to learn more.
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
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