Consumer Staples Select Sector SPDR® ETF
Investors Should Avoid Defensive Sectors If Rates Rise
Valuations are at the higher end of their historical range. Investors should avoid defensive sectors, which are highly sensitive to interest rate changes.
Last Week’s Consumer Space: Which Stocks Were the Outliers?
At the end of the fourth week of April 2016, the S&P Consumer Staples slightly outperformed the S&P 500 and the S&P Consumer Discretionary as a whole. Let’s see which stocks stood out.
Archer Daniels Midland Announces New Expansion Plan
Archer Daniels Midland fell 0.65% to close at $44.46 per share on January 10. Its weekly, monthly, and YTD price movements were -3.8%, -3.3%, and -2.6%.
What Helped Whole Foods’ Top Line in 3Q16?
Whole Foods Market reported a 1.9% year-over-year (or YoY) increase in its top line, primarily driven by new store openings.
Why the Gloomy GDP Estimate Is Not Cause for Panic
There are several reasons why the gloomy GDP estimate is not cause for panic. The slowdown in GDP growth seems to be a temporary setback.
BMO Capital Increases Dr Pepper Snapple’s Price Target to $100
Dr Pepper Snapple Group (DPS) has a market cap of $18.4 billion. It rose by 1.7% to close at $97.87 per share on July 28, 2016.
Will PepsiCo’s Margins Continue to Improve in 2Q15?
PepsiCo’s margins have improved in a volatile macro environment helped by tight cost controls and higher net pricing.
Government Sector Influenced Personal Income and Expenses Rose
According to the BEA, personal income rose 0.30% to $52.5 billion in August 2015. This was below the consensus estimate of 0.40%.
Home Depot Outlook Depends on the Consumer
If it’s to increase sales, in-store execution, omni-channel efforts, and better customer service will be critical for Home Depot (HD).
Hormel’s Specialty Food Segment Performed Well in 3Q15
Hormel Foods Corporation, based in Austin, Minnesota, is a multinational manufacturer and marketer of consumer-branded food and meat products.
How Might Kroger’s Performance Shape up in Fiscal 2017?
Kroger (KR) recorded a 9.6% YoY increase in EPS in fiscal 4Q16, reaching 57 cents, as compared to the consensus estimate of 54 cents per share.
What Drove Colgate-Palmolive’s Margins Growth in 1Q17?
Colgate-Palmolive (CL) witnessed improved margins in 1Q17 despite soft sales thanks to its “Funding the Growth” initiative aimed at reducing costs and driving efficiency.
What Contributed to Hormel Foods’ 3Q15 Segment Performance?
Refrigerated Foods constituted 48% of Hormel Food’s net sales and 41% of its total segment operating profit in 3Q15.
Which Consumer Stocks Were the Outliers on September 29?
On September 29, 2016, the S&P Consumer Discretionary slightly outperformed the S&P 500 and the S&P Consumer Staples.
Consumer Spending Edges up in February 2015
Consumer spending remained subdued in February. The harsh weather kept consumers indoors. Individuals used the gains from lower gasoline prices to boost their savings.
Why Did Moody’s Rate Dr Pepper Snapple Senior Notes as Baa1?
Dr Pepper Snapple Group (DPS) declared a quarterly dividend of $0.53 per share on its common stock. This dividend will be paid on January 5, 2017, to shareholders of record on December 13, 2016.
Inflation Remains Subdued
Inflation remains subdued by all measures. Since inflation is way below the Fed’s long-term target, the Fed can afford to keep interest rates lower for a little longer.
Dr Pepper Snapple’s Stock Outperforms Peers in 2015
As of July 24, Dr Pepper Snapple’s (DPS) stock price has appreciated by 8.8% to $77.92 since the beginning of 2015.
Advance retail sales for December 2014 were disappointing
Markets were disappointed by the weak retail sales report. Estimates for advance retail sales were $442.9 billion in December 2014.
Why Innovation Should Drive PepsiCo’s 2015 Revenue
In April 2015, PepsiCo (PEP) launched two new protein-packed snack mixes under its Cracker Jack’D food brand.
Can PepsiCo’s Stock Pick Up Momentum in 2016?
As of January 28, about 59% (or 17) analysts out of 29 analysts, have a “buy” recommendation for PepsiCo and 12 analysts have a “hold” recommendation. None of the analysts have a sell recommendation.
Why did consumers’ confidence rise in December?
The Board’s Consumer Confidence Index rose to 92.6 in December—compared to 91 in November. For November, the index was revised from an initially reported value of 88.7.
Your Outliers in the Consumer Space: 5th Week of August
By the end of August, the S&P Consumer Staples had outperformed the S&P Consumer Discretionary and SPY with respective returns of 0.89%, -0.18%, and 0.50%.
Kocherlakota’s thoughts about monetary policy stimulus in 2015
Kocherlakota asked “Should the fed funds rate target range be raised soon?” He thinks it will be a few years before PCE inflation returns to the target.
The US Economy Has a Hiccup—Hopefully Just One
The second estimate from the Bureau of Economic Analysis (or BEA) showed that gross domestic product (or GDP) growth for the US economy slowed to 2.2%.
Why Hershey Stock Fell despite Strong 2Q17 Results
Hershey (HSY) posted better-than-expected 2Q17 results, which it released on June 26. Hershey’s sales and earnings per share beat Wall Street’s expectations.
The Boon of Tax Reform and Infrastructure Spending: More Than Just High Hopes?
President Trump is expected to submit a tax reform and infrastructure spending package to Congress this year—all aimed at increasing business investments.
Coca-Cola Deal Gives Monster Beverage Yet Another Boost
In 2014, Monster Beverage’s net sales increased by 9.7% to $2.5 billion, with 21.7% of its net sales from outside the United States.
How’s ADM Advancing with Its Portfolio Management Strategy?
As part of its portfolio management strategy, Archer Daniels Midland (ADM) sold its Brazilian sugar cane ethanol operations.
Procter & Gamble: Global Giant in Household, Personal Products
The Procter & Gamble Company, or P&G, is the largest household and personal products company in the world. It was established in 1837 by William Procter and James Gamble.
Can Walmart Beat Wall Street Expectations in 3Q16?
Walmart (WMT) is scheduled to release its earnings report for 3Q16 on November 17, 2015. Analysts project Walmart’s adjusted EPS to come in at $0.98 in 3Q16, a decline of 14.9% year-over-year.
Inside Walmart’s Valuation and Growth Outlook
As of August 10, 2107, Wal-Mart Stores (WMT) stock was trading at a 12-month forward PE (price-to-earnings) of 18.2x.
Coca-Cola, PepsiCo, Dr Pepper Snapple: A Valuation Showdown?
As of March 28, Coca-Cola and PepsiCo were trading at 12-month forward PE multiples of 22.7x and 22.0x, respectively.
How Kellogg Stacks Up against Peers
The majority of analysts covering Kellogg (K) remain neutral on the stock, given the industry-wide slowdown.
Analyzing Hershey’s Emphasis on Product Innovation
Hershey plans to position dark chocolate as a lifestyle choice in the US. It has thus begun promoting its dark chocolate brands for specific consumption.
Dimensional Fund Advisors’ Major Holdings in Q3
Dimensional Fund Advisors’ top buys are Apple (AAPL), AT&T (T), Microsoft (MSFT), L3Harris Technologies (LHX), and Verizon Communications (VZ).
Will Analysts Change Their Outlook on KHC Post-1Q17?
The majority of analysts covering Kraft Heinz (KHC) remain positive on the stock. However, analysts’ consensus outlook could change in the days to come.
Mintel Forecasts Strong Growth in the US Energy Drink Market
The US energy drink and shots market grew by 56% between 2009 and 2014, even though the category was entangled in litigation and had negative publicity.
Weighing Kraft Heinz’s Strengths and Opportunities
Kraft Heinz has a wide network of processing facilities and distribution centers, which allow it to supply fresh and high-quality products to customers.
Distilled Spirits Are Growing Steadily
Beer has been losing its market share in recent years, giving way to distilled spirits and wine.
Evaluating Kraft Heinz’s Core Business Strategies
Kraft Heinz is focusing on core business practices, including ZBB (zero-based budgeting), revenue management, and MBO (management by objectives).
An Overview of Hershey, America’s Largest Chocolatier
Hershey is the largest producer of chocolate in North America. It is a global leader in chocolate, sugar confectionery, and chocolate-related products.
Walmart: Price Wars In The United Kingdom’s Grocery Market
The United Kingdom has been one of the most successful overseas forays for Walmart (WMT). The company operates ~576 stores in the country.
Why Dividend Stocks Have Underperformed This Year
Dividend stocks have underperformed this year so far. The dividend yield measures dividends payed by a company in the last 12 months relative to its share price.
Procter & Gamble Divestitures: Is 43-Brand Coty Deal the Last?
Brand divestitures, numbering ~93 out of a possible 100, according to last year’s announcement, will enable Procter & Gamble to focus on its core portfolio where it’s more market dominant.
How PepsiCo Plans to Boost Beverage Sales in 2015
PepsiCo expects its recently launched flavors to boost beverage sales, which accounted for 47.0% of the company’s total revenue in 2014.
Hershey’s Steps to Improve Suppliers Productivity and Conscious Sourcing
Hershey has set a goal of sourcing 100% cocoa from certified cocoa farms. In fiscal 2014, it sourced 30% certified cocoa.
Alcoholic Beverage Industry Is Reluctant to Embrace E-Commerce
Manufacturers in the alcoholic beverage industry can’t sell directly to consumers due to a three-tier distribution system. This discourages them from having their own e-commerce channels.
US Spirits Imports in 1Q15: Double-Digit Growth in Key Categories
Distilled spirits imports increased by 17.8% to $1.5 billion in the first quarter of 2015, based on data provided by the Distilled Spirits Council of the United States.
When to Expect a Liftoff in Rates
San Francisco Fed president John Williams noted that the Fed’s ability to hold off a liftoff in rates is “more limited” than its ability to tighten. A rate hike could be expected in September if the economy continues to grow in the next two months.
US Soda Update: Case Volumes Decline for the Tenth Straight Year
Carbonated soft drink volumes dropped to 8.8 billion 192-ounce cases in 2014. This is the tenth straight year of decline.
Innovation and Marketing Fuel Dr Pepper Snapple’s Future Growth
Dr Pepper Snapple is creating more visibility for its products by associating with popular movies. It expects its marketing spend to be ~7.6% of net sales in 2015.
Monster Beverage’s Stock Outperforms Peers in 2015
As of July 31, 2015, Monster Beverage (MNST) was trading at a stock price of $153.55, up 41.9% compared to the beginning of 2015.
CVS versus Walgreens: Which Has a More Diversified Business Model?
CVS generates close to 70% of its annual sales by offering a full range of pharmacy benefit management services.
Making Sense of PepsiCo’s Share Price Movement in 2015
PepsiCo’s share price fell 1.1% since the announcement of its 1Q15 results on April 23. The company’s net revenue fell 3.2% to $12.2 billion in 1Q15.
Coca-Cola Bottler Merger: Benefits for CCE and KO Investors
As per the deal specifics that the companies disclosed, Coca-Cola Enterprises (CCE) shareholders should have a 48% shareholding in the new company.
Why Did Food Retail Stocks Fall in September?
The food retail sector has been under pressure this year due to concerns about deflation and increasing competition.
JAB to Challenge Nestle, Global Leader of Portioned Coffee Market
JAB’s share in the global coffee market is estimated to reach approximately 20% with the addition of Keurig’s brands and products to its portfolio.
Sizing up Kraft Heinz’s SKU Rationalization Technique to Manage Inventory
Heinz has been using an inventory management technique, SKU rationalization to focus on profitable growth, which helps improve sales and profitability.
Conagra’s Valuation after Its 3Q17 Earnings
As of March 24, 2017, Conagra Brands (CAG) was trading at a 12-month forward PE (price-to-earnings) ratio of 21.9x.
Anheuser-Busch InBev Bids for SABMiller: Analysis
On October 7, Anheuser-Busch InBev announced a formal cash bid of 42.2 pounds per share to SABMiller’s board. This was the third offer rejected by SABMiller.
Monster Beverage’s Valuation Benefits from 1Q16 Results
Monster Beverage’s valuation multiple is higher than its nonalcoholic beverage peers Coca-Cola (KO), PepsiCo (PEP), and Dr Pepper Snapple (DPS).
Key Categories of the Spirits Market
Whiskey is the largest category of the US spirits market with a 33% share of gross revenues. Vodka, cordials, and rum hold 25%, 11%, and 10%, respectively.
Keurig Green Mountain Caters to Organic Coffee Demand
Organic coffee is the largest category of US organic imports in terms of dollar value. After declining for many years, organic coffee imports increased by 31.3% to $332.5 billion in 2014.
Dr Pepper Snapple Gets a Hold Recommendation from Most Analysts
Of the 22 analysts covering Dr Pepper Snapple, 15, or 68%, have given the company a “hold” recommendation as of December 31, 2015.
Alcoholic Beverages: A Key Category of the Beverage Industry
According to the Beverage Marketing Corporation, alcoholic beverages such as beer, wine, and distilled spirits, account for 20% of the US beverage market.
Procter & Gamble Kicked off the Campaign for Its Pantene Brand
Procter & Gamble (PG) fell 1.8% to close at $83.58 per share during the second week of November 2016.
The Week Ahead: Key Dates in Consumer from May 22–26, 2017
In this part of the series, we’ll look at the important events for the week ahead, from May 22–26, 2017.
Dr Pepper Snapple’s Bleak Outlook, and What This Means for Its Stock Price
On February 17, Dr Pepper Snapple’s stock price declined by 2.9% to $89.33, following the announcement of its 4Q15 results and its weak outlook for 2016.
Costco’s Industry Positioning: A Porter’s 5 Force Analysis
Costco’s suppliers include companies like PepsiCo (PEP), Procter & Gamble (PG), and the Kraft Heinz Company (KHC). No single supplier accounts for over 5% of revenue.
Investing in Restaurant Stocks: Tailwinds and Challenges
You could consider investing in restaurant stocks, given the solid fundamentals in the sector and the macroeconomic tailwinds favoring the industry.
How HSY, MDLZ, K, and KHC Compare in Terms of Valuations
On June 7, 2017, Kraft Heinz (KHC) was trading at a 12-month forward PE (price-to-earnings) ratio of 24.8x, which is higher than its peers.
Sam’s Club Missed Estimates in Fiscal 4Q16, but Memberships Rose
Sam’s Club reported $52.3 billion in sales (excluding fuel) in fiscal 2016, up 1.4% YoY. Comps growth for the segment came in at 0.4%.
These Were Bill Ackman’s Largest Sector Holdings in 3Q17
Pershing Square Capital Management’s top sectors in 3Q17 were consumer discretionary (XLY), information technology (XLK), consumer staples (XLP), real estate (IYR), and materials (XLB).
Investing in soft drink companies with ETFs
Consumer staple ETFs provide exposure to companies that produce essentials, including food, beverages, tobacco, and household items. The Consumer Staples Select Sector SPDR Fund (XLP) tracks the S&P Consumer Staples Select Sector Index.
Walmart’s Key Challenges In Its Business Environment
The NLRB filed a complaint last January. It accused Walmart of violating labor laws. The NLRB claims that the retailer acted against workers who joined unions.
Why China Is Such an Important Market for Hershey in 2015
Hershey is the fastest-growing confectionery company in China, and Hershey expects China to become its second-largest market behind the US by 2017.
The Proposed ABI-SABMiller Deal: Will Market Concentration Rise?
The top five beer brewers accounted for nearly 52% of the total global sales volume in 2014. ABI is the leader worldwide with 20.8% of the market share.
Why Walmart Stock Fell More than 10% in Fiscal 4Q18
Walmart (WMT) reported mixed fiscal 4Q18 results on February 20, 2018. After its results were released, Walmart stock fell more than 10%.
What’s So Special About Specialty Tea?
According to the Tea Association of the USA, the specialty tea segment wholesale value increased to an estimated $1.9 billion in 2014, up 9.8% from 2013.
Understanding Coca-Cola’s business segments
Overall, in 2013, still beverages performed better than sparkling beverages across all the segments except for Europe. Sparkling beverage volumes have been declining over the past few years.
How Walmart Compares to Its Peers
On May 12, 2017, Walmart (WMT) was trading at a 12-month forward PE multiple of 17.5x.
Demand for Expensive Liquor Is Growing
The performance of liquor business in 2014 reflects the premiumization trend, or a preference for better, premium, or expensive liquor brands.
Will Coffee Peers Step Up Their Game with Jacobs Douwe Egberts?
With the emergence of Jacobs Douwe Egberts, Keurig and other coffee producers will focus more on expanding their product portfolios. They’ll also focus on an international presence to capture the growing global demand for coffee.
Protein Prices Drag Down April’s Food Price Index
Trends in protein prices affect the financial results for Tyson Foods, which produces about one in five pounds of chicken, beef, and pork in the United States.
Moody’s Rates PepsiCo’s Senior Secured Notes as ‘A1’
PepsiCo (PEP) has a market cap of $157.2 billion. It rose by 0.59% to close at $108.91 per share on July 11, 2016.
Why personal consumption expenditure is important to investors
The U.S. Bureau of Economic Analysis issues PCE data, and the price index is a measure of the average increase in prices for all domestic personal consumption.
Who Were the Outliers in the Consumer Space on September 28?
On September 28, the S&P 500 outperformed the S&P Consumer Discretionary and the S&P Consumer Staples, which saw returns of 0.53%, 0.30%, and 0.11%.
How Conagra Delivered Impressive Earnings in Fiscal 3Q17
Conagra Brands’ (CAG) fiscal 3Q17 EPS topped analysts’ estimates. But sales fell again YoY and missed Wall Street analysts’ consensus estimate.
US crude oil imports rose in December 2014
The import of petroleum products rose in December. It fell for two consecutive months. Specifically, crude oil imports rose in quantity and value.
Could Wage Growth Improve as Employment Picks Up?
The US economy is swiftly adding jobs, with the latest addition of 227,000 jobs in January 2017.
Consumer Spending and Business Investment Disappoint US Economy
Tepid consumer spending negatively impacts ETFs including the Consumer Staples Select Sector SPDR Fund and the Consumer Discretionary Select Sector SPDR Fund.
US consumer sentiment at a multi-year high
Consumer sentiment as measured by Thomson Reuters and University of Michigan’s report rose to 93.8 based on a preliminary reading for December 2014.
Dr Pepper Snapple Group Dipped Due to a Chance of a Top-Line Fall
Dr Pepper Snapple Group (DPS) has a market cap of $16.1 billion. It fell 4.3% to close at $86.86 per share on October 4, 2016.
How Colgate Is Maintaining Margins in the Face of Headwinds
Colgate’s worldwide gross profit margin fell to 58.5% in 2014 from 58.6% in 2013.
How the S&;P 500’s Sectors Could Perform in 2020
The S&P 500 Index (SPY) has gained 28% YTD. Tech stocks constituted 22.8% of SPY, the highest among the 11 major sectors.
Understanding PepsiCo’s Business Segments and More
PepsiCo (PEP) is one of two beverage-industry behemoths. We break down everything investors should know about the stock and the business.
How to Trade a Broken (looking) Market (Hint: Carefully)
It’s easy to be early after a correction I always get pretty excited during a stock market correction, assuming I have positioned correctly with cash on hand. This market showed so many signs of toppiness, extreme optimism, and high valuations that hopefully many investors at least were selling the highly valued names they owned. My […]
Dow Jones: November Was Its Best Month since June
This week, the Dow Jones Industrial Average Index (DJI) rose 1%. On a month-to-date basis, it has risen 3.8% and heading for the biggest gain since June.
Why signs of a weak economy affect restaurants
This restaurant industry does well when the economy is expanding and poorly when the economy is contracting. In other words, it’s cyclical.