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6 Consumer Staple Stocks to Withstand Virus-Induced Disturbances

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Wall Street continues to grapple with severe market volatility as the coronavirus pandemic is showing no signs of slowing down. Market participants have been left in the lurch with day-to-day fluctuations ranging from 5-7%.

However, a few consumer staple stocks with a favorable Zacks Rank have witnessed upward estimate revisions for 2020 earnings per share (EPS) during the past 30 days amid the coronavirus pandemic, which has been wreaking havoc on the global stock markets.

Notably, market mayhem and possibility of a near-term recession as warned by several economists and financial experts have also failed to deter these stocks. Investors can take a look at these stocks as these are likely to cushion their portfolio against market uncertainty.

Wall Street Witness Historic Rout

On Mar 16, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — plummeted 12.9%, 12% and 12.3%, respectively. Notably, during the intraday session, a first-level circuit breaker is triggered when the S&P 500 drops by 7% resulting in a 15-minute pause in trading. Another halt happens when the benchmark index tumbles 13% on the day.

After Monday’s losses, the Dow is currently 31.7% below its all-time high. Meanwhile, the S&P 500 and the Nasdaq Composite are more than 29% below their all-time highs recorded last month. Notably, the Dow fell to its lowest point since 2017. Year to date, these indexes have lost 29.3%, 26.1% and 23.1%, respectively.

The COBE VIX — popularly known as the best fear gauge of Wall Street — surged 43% to record a new all-time high of 82.69, surpassing its previous peak level of 80.74 posted on Nov 21, 2008.

 

Why Consumer Staple Stocks

The consumer staples sector includes companies that provide necessities and products for daily use. This makes the sector defensive in nature. Thereore, this has always been a go-to place for investors, who want to play it safe during extreme market fluctuations. Adding stocks from the consumer staples basket lends more stability to portfolios in an uncertain market condition.

The stock market mayhem is likely to continue in the near term as the coronavirus is still spreading globally. This caused a significant disruption in global economic activities resulting in a global recession threat. At this critical stage, investment in consumer staple stocks will be prudent.

Our Top Picks

We have narrowed down our search to six consumer staple stocks that have witnessed strong EPS estimate revisions in the past month. Notably, the past month was the period when Wall Street witnessed one of the worst financial disasters in its history. Moreover, the stocks have solid growth potential and a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the price performance of our six picks in past month.

 

Monster Beverage Corp. (MNST - Free Report) develops, markets, sells, and distributes energy drink beverages and concentrates in the United States and internationally. It operates through three segments: Monster Energy Drinks, Strategic Brands and Other. The company has an expected earnings growth rate of 12.3% for the current year. The Zacks Consensus Estimate for the current year has improved 0.9% over the past 30 days.

Campbell Soup Co. (CPB - Free Report) manufactures and markets food and beverage products. It operates through Meals & Beverages and Snacks segments. The company has an expected earnings growth rate of 13% for the current year (ended July 2020). The Zacks Consensus Estimate for the current year has improved 2.8% over the past 30 days.

Constellation Brands Inc. (STZ - Free Report) produces, imports and markets beer, wine and spirits in the United States, Canada, Mexico, New Zealand and Italy. The company has an expected earnings growth rate of 4.8% for the current year (ended February 2021). The Zacks Consensus Estimate for the current year has improved 0.2% over the past 30 days.

SunOpta Inc. (STKL - Free Report) offers an integrated business models in the natural and organic food, supplements and health and beauty markets. The company has an expected earnings growth rate of 32.4% for the current year. The Zacks Consensus Estimate for the current year has improved 10.7% over the past 30 days.

The Hain Celestial Group Inc. (HAIN - Free Report) manufactures, markets, distributes and sells organic and natural products. It operates in seven segments: the United States, United Kingdom, Tilda, Ella's Kitchen UK, Canada, Europe and Hain Ventures. The company has an expected earnings growth rate of 7.8% for the current year (ended June 2020). The Zacks Consensus Estimate for the current year has improved 1.4% over the past 30 days.

Ingredion Inc. (INGR - Free Report) produces and sells starches and sweeteners for various industries. It operates through four segments: North America; South America; Asia Pacific; and Europe, Middle East, and Africa. The company has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.7% over the past 30 days.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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