U.S. equities are trading meekly on Monday, inching lower with caution. The specter of an outright trade war with China looms large, with a tit-for-tat involving billions in import tariffs already underway. Moreover, central banks are turning increasingly hawkish with the Federal Reserve jacking interest rates higher again last week and promising two more hikes before the year is out. The European Central Bank is committed to ending its bond buying stimulus program before the end of the year.
Everywhere you look, evidence of overheating is plain to see. The job market is ultra-tight, with a 3.8% unemployment rate. Inflation is perking up. Yet consumers remain picky, focusing on cost savings, online shopping, and increasingly upmarket store brands. That’s putting the squeeze on consumer products companies in a huge way — as the sector group has badly lagged the overall market since early 2016.
Here are 10 consumer staples stocks that remain on the clearance rack:
Bargain Bin Consumer Stocks: Coca Cola (KO)
The Coca-Cola Co (NYSE:KO) shares are once again being turned away at their 200-day moving average, continuing a pattern of disappointment going back to February and setting the stage for a test of the May lows, which would be worth a decline of nearly 6% from current levels. The company continues to struggle with health-based resistance to sugary sodas and new interest in flavored sparkling water.
The company will next report results on July 24, before the bell. Analysts are looking for earnings of 60-cents-per-share on revenues of $8.6 billion. When the company last reported on April 24, earnings of 47-cents-per-share beat estimates by a penny on a 16.6% decline in revenues.
Bargain Bin Consumer Stocks: Procter & Gamble (PG)
Procter & Gamble Co (NYSE:PG) shares have closed their post-earnings gapped decline from April, but are rolling over anew setting up a test of the May lows below the $72-a-share threshold. The stock is down more than 18% from December amid growing chatter the company could be split in two in a bid to boost shareholder return.
The company will next report results on July 19 before the bell. Analysts are looking for earnings of 91-cents-per-share on revenues of $16.7 billion. When the company last reported on April 19, earnings of $1-per-share beat estimates by a penny on a 4.3% rise in revenues.
Bargain Bin Consumer Stocks: Colgate (CL)
Colgate-Palmolive Company (NYSE:CL) got whacked back in January and hasn’t been able to recover. Since then, CL has been relegated to remaining below its 50-day moving average and setting up a failed test of the late 2016/early 2017 support with a critical low at $62. If that fails to hold, levels not seen since 2015 would be in play.
The company will next report results on July 27 before the bell. Analysts are looking for earnings of 79-cents-per-share on revenues of $4 billion. When the company last reported on April 27, earnings of 74-cents-per-share beat estimates by a penny on a 6.4% rise in revenues.
Bargain Bin Consumer Stocks: Philip Morris (PM)
The rise of e-cigs and vaping means the cigarette business just isn’t what it used to be. Especially with all the hype surrounding the JUUL device, a compact and stylish e-cig that is capturing a lot of market share. Philip Morris International Inc. (NYSE:PM) is fighting back with products like TEEPs, but is lagging behind the curve badly.
The company will next report results on July 19, before the bell. Analysts are looking for earnings of $1.24-per-share on revenues of $7.6 billion. When the company last reported on April 19, earnings of $1 beat estimates by 12 cents on a 13.7% rise in revenues.
Bargain Bin Consumer Stocks: Altria Group (MO)
Like PM before it, Altria Group Inc (NYSE:MO) faces a secular downturn in its core cigarette business as upstarts in the e-cig space steal market share. Shares are down more than 20% from the highs hit in December. Not only is its core business under threat, but tobacco companies face risks from the Eurozone’s threatened tariffs against American cigarettes as well.
The company will next report results on July 26, before the bell. Analysts are looking for earnings of $1.01-per-share on revenues of $5 billion. When the company last reported on April 26, earnings of 95-cents-per-share beat estimates by 4 cents on a 1.8% rise in revenues.
Bargain Bin Consumer Stocks: Kimberly Clark (KMB)
Kimberly Clark Corp (NYSE:KMB) shares are down more than 20% from the highs hit in January and more than 30% from the double-top high near $130 set in the summers of 2016 and 2017. A break below support near $100 would push prices back to levels not seen since 2015. Margins are being pressured not only by limited ability to raise prices but also by higher commodity costs.
The company will next report results on July 24, before the bell. Analysts are looking for earnings of $1.61-per-share on revenues of $4.7 billion. When the company last reported on April 23, earnings of $1.71 beat estimates by 3 cents on a 5% rise in revenues.
Bargain Bin Consumer Stocks: Hershey Company (HSY)
Hershey Co (NYSE:HSY) is being turned away after a failed attempt to rally above its 50-day moving average. Down nearly 20% from its late December high, shares are struggling to stabilize after returning to levels last seen in 2016. Health-conscious shoppers aren’t exactly flocking to buy the company’s cheap high-calorie treats. And when they want to indulge, it’ll be with a focus on organic high-end products. The company suffered a downgrade from Credit Suisse analysts last week.
The company will next report results on July 26, before the bell. Analysts are looking for earnings of $1.11-per-share on revenues of $1.7 billion. When the company last reported on April 26, earnings of $1.41 beat estimates by a penny on a 4.9% rise in revenues.
Bargain Bin Consumer Stocks: Hormel Foods (HRL)
Hormel Foods Corp (NYSE:HRL) shares are threatening to fall away from a persistent resistance range gong back to December bounded by $37 on the high side and the $32-a-share level on the downside. The company is vulnerable to the imposition of Chinese tariffs on U.S. food companies, which will limit its export competitiveness.
The company will next report results on Aug. 23, before the bell. Analysts are looking for earnings of 39-cents-per-share on revenues of $2.4 billion. When the company last reported on May 24, earnings of 44-cents-per-share missed estimates by a penny on a 6.6% rise in revenues.
Bargain Bin Consumer Stocks: Clorox Co (CLX)
Clorox Co (NYSE:CLX) shares are being turned away from their 200-day moving average yet again, continuing a rough year-to-date pattern and marking a 15% decline from its December high. Not even the announcement of a $2 billion share repurchase program in late May has been able to light a fire beneath the bulls.
The company will next report on Aug. 1, before the bell. Analysts are looking for earnings of $1.59-per-share on revenues of $1.7 billion. When the company last reported on May 2, earnings of $1.37 beat estimates by 6-cents-per-share on a 2.7% rise in revenues.
Bargain Bin Consumer Stocks: General Mills (GIS)
General Mills, Inc. (NYSE:GIS) shares are languishing in a four-month consolidation range well below its 200-day moving average. Shares are down by nearly a third from the highs seen in January as higher commodity prices and limited ability to pass through inflation to consumers has pressured profitability. Goldman analysts recently started coverage, assigning a price target near current levels.
The company will next report results on July 27, before the bell. Analysts are looking for earnings of 74 cents on $3.9 billion in revenues. When the company last reported on March 21, earnings of 79-cents-per-share beat estimates by a penny on a 2.3% rise in revenues.
Anthony Mirhaydari is the founder of the Edge (ETFs) and the Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
