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Consumer Staples Sector Stands Out

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Consumer staples sector takes the lead

The Consumer Staples Select Sector SPDR ETF (XLP) led the SPDR S&P 500 ETF (SPY) with a gain of 1.0% in yesterday’s trade. Stocks at the top of the sector on the day were Kimberly-Clark Corporation (KMB), The Hershey Company (HSY), Altria Group (MO), The Kroger Company (KR), Coca-Cola Enterprises (CCE), and Dr. Pepper Snapple Group (DPS). These stocks rose 2.9%, 2.8%, 1.9%, 1.9%, 1.7%, and 1.5%, respectively. The following table presents the moving average values and analyst price targets of the above stocks.

 

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Moving average analysis

  • As we see from the table above, the beta values for all the above stocks are less than 1. The beta value is the coefficient of the sensitivity of a stock to market movement and denotes the volatility measure of that stock. A beta of less than 1 implies less sensitivity to broad market movement, while a beta of more than 1 denotes a more volatile stock.
  • Since the above stocks are less sensitive to broad market movement, they are a safe bet ahead of the Fed meeting. These stocks will be less volatile to whatever direction the market takes once the Fed’s interest rate results are out.
  • As we can see, Kimberly-Clark Corporation (KMB), The Kroger Company (KR), and Dr. Pepper Snapple Group (DPS) are all above their 100-day, 50-day, and 20-day moving averages. The trailing-one-year returns of these stocks are positive.
  • The only exception to the moving average price trend was Coca-Cola Enterprises (CCE), which traded below its moving averages. CCE’s rise in yesterday’s trade was prompted by the company’s prediction of 8.4% growth in its EPS (earnings per share) in the coming year.
  • The trailing-one-year returns of KMB, KR, and DPS are 9.2%, 36.1%, and 31.4%, respectively, as of yesterday.
  • The average relative strength index, or RSI, of the stocks in the table is 58, which suggests that these stocks are neither undervalued or overbought.
  • Analysts’ stock price targets for these stocks are greater than their trading prices. The average growth potential for these stocks is 6%.

In the next part of this series, we’ll look at the performances of key stocks in the SPDR S&P 500 ETF (SPY) in yesterday’s trade.

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