We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Top Stocks to Buy as Recession Fright Intensifies
Read MoreHide Full Article
The U.S. economy has for quite some time defied past estimates of an imminent economic slump. This is because U.S. employers have continued to hire new employees at a healthy pace in recent times while the jobless rate is hovering near historic lows. However, a widely followed index of future economic activity has fallen yet again recently and raised worries of a likely recession in the U.S. economy.
The Conference Board’s Leading Economic Index (LEI) slipped to 108.4 in March from February’s revised reading of 109.7, marking the 12th successive monthly drop and the lowest since November 2020. The LEI, in reality, fell 1.2% month over month in March, more than economists’ projected decline of 0.7%, and marked the sharpest single-month drop since April 2020 when the economy grappled with the coronavirus pandemic.
The LEI fell by 4.5% during the six months between September 2022 and March 2023, way more than the previous six month’s decline of 3.5%. Thus, the LEI has been indicating a recession for a somewhat long time, while economic weakness is all set to intensify throughout the length and breadth of the U.S. economy, and might even lead to a recession beginning in mid-2023 as stated by Justyna Zabinska-La Monica, Senior Manager, at the Conference Board.
The continuing banking turmoil in the United States has also elevated concerns about economic growth. Quite a few U.S. financial institutes are also forecasting that the country’s economy is heading toward a recession. The collapse of two major U.S. banks and the stress on the entire banking system may impact credit growth, which in all likelihood, will hamper real GDP growth.
Given such worries of an impending recession, investors should place their bets on recession-proof stocks that provide a steady stream of income despite economic downturns. Notable among them are defensive stocks, or stocks that are non-cyclical in nature. That means demand for their products and services is constant, irrespective of market conditions.
Such companies exist in the utilities and consumer staples sectors. After all, electricity, gas, water, and food are all essentials, and their demand will remain unaltered during recession-induced market volatility.
We have, thus, selected five stocks from the aforesaid areas that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
MYR Group (MYRG - Free Report) is a leading specialty contractor serving the electrical infrastructure market throughout the United States that has the experience and expertise to complete electrical installations of any type and size. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 217.6% over the past 60 days. MYRG’s expected earnings growth rate for the current year is 14.1%.
Coty (COTY - Free Report) manufactures, markets and distributes beauty products worldwide. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.8% over the past 60 days. COTY’s expected earnings growth rate for the current year is 32.1%.
e.l.f. Beauty (ELF - Free Report) operates as a cosmetic company. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.2% over the past 60 days. ELF’s expected earnings growth rate for the current year is 69.1%.
KimberlyClark (KMB - Free Report) is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. KMB’s expected earnings growth rate for the current year is 5.5%.
PepsiCo (PEP - Free Report) is one of the leading global food and beverage companies. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. PEP’s expected earnings growth rate for the current year is 6.5%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
5 Top Stocks to Buy as Recession Fright Intensifies
The U.S. economy has for quite some time defied past estimates of an imminent economic slump. This is because U.S. employers have continued to hire new employees at a healthy pace in recent times while the jobless rate is hovering near historic lows. However, a widely followed index of future economic activity has fallen yet again recently and raised worries of a likely recession in the U.S. economy.
The Conference Board’s Leading Economic Index (LEI) slipped to 108.4 in March from February’s revised reading of 109.7, marking the 12th successive monthly drop and the lowest since November 2020. The LEI, in reality, fell 1.2% month over month in March, more than economists’ projected decline of 0.7%, and marked the sharpest single-month drop since April 2020 when the economy grappled with the coronavirus pandemic.
The LEI fell by 4.5% during the six months between September 2022 and March 2023, way more than the previous six month’s decline of 3.5%. Thus, the LEI has been indicating a recession for a somewhat long time, while economic weakness is all set to intensify throughout the length and breadth of the U.S. economy, and might even lead to a recession beginning in mid-2023 as stated by Justyna Zabinska-La Monica, Senior Manager, at the Conference Board.
The continuing banking turmoil in the United States has also elevated concerns about economic growth. Quite a few U.S. financial institutes are also forecasting that the country’s economy is heading toward a recession. The collapse of two major U.S. banks and the stress on the entire banking system may impact credit growth, which in all likelihood, will hamper real GDP growth.
Given such worries of an impending recession, investors should place their bets on recession-proof stocks that provide a steady stream of income despite economic downturns. Notable among them are defensive stocks, or stocks that are non-cyclical in nature. That means demand for their products and services is constant, irrespective of market conditions.
Such companies exist in the utilities and consumer staples sectors. After all, electricity, gas, water, and food are all essentials, and their demand will remain unaltered during recession-induced market volatility.
We have, thus, selected five stocks from the aforesaid areas that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
MYR Group (MYRG - Free Report) is a leading specialty contractor serving the electrical infrastructure market throughout the United States that has the experience and expertise to complete electrical installations of any type and size. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 217.6% over the past 60 days. MYRG’s expected earnings growth rate for the current year is 14.1%.
Coty (COTY - Free Report) manufactures, markets and distributes beauty products worldwide. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.8% over the past 60 days. COTY’s expected earnings growth rate for the current year is 32.1%.
e.l.f. Beauty (ELF - Free Report) operates as a cosmetic company. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.2% over the past 60 days. ELF’s expected earnings growth rate for the current year is 69.1%.
KimberlyClark (KMB - Free Report) is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. KMB’s expected earnings growth rate for the current year is 5.5%.
PepsiCo (PEP - Free Report) is one of the leading global food and beverage companies. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. PEP’s expected earnings growth rate for the current year is 6.5%.