Thursday, 19. October 2017  
24.01.2017 22:15
Author: Alex Waber

STOCK SCREEN: Consumer Staples Stocks Vulnerable In A Reflationary Market

 

Over the last year the global hunt for yield pumped up the valuations of stocks that act like bonds. Stocks in sectors like consumer staples, with steady dividend payouts were finding big fans in the market, pushing up P/E ratios for certain consumer staples to multi-year highs.

 

However, ignoring the risks associated with the artificially inflation of the value of certain companies with stable earnings streams, might be a costly mistake, if inflation and interest rates continue to climb.

 

While President’s Trump inauguration drew the attention of investors recently, inflation expectations seem to rise in the U.S. and in Europe. Germany saw its fastest print in headline CPI in over three years and also producer prices on almost all measures inflected positively within Europe.

 

In this context, we screen the Consumer Staples sector for stocks that seem most vulnerable according to our AVM’s Intrinsic Stock Value estimates.

 

Here are the filter criteria:

1. Market capitalization above 1bn.

2. Expensive according to our AVM’s Mean Multiple, Graham, and Greenblatt approach.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

INDUSTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

 ABIOMED INC

 United States

 Healthcare Products

111.84

4852

-40.8

-100.0

-52.8

 ALTRIA GROUP INC

 United States

 Tobacco

70.01

136538

-42.3

-50.3

-39.1

 BOSTON SCIENTIFIC CORP

 United States

 Healthcare Products

23.90

32544

-44.1

-100.0

-100.0

 CONAGRA BRANDS INC

 United States

 Food

39.13

17030

-50.9

-82.1

-97.8

 COTT CORPORATION

 Canada

 Beverages

14.42

1996

-45.7

-100.0

-100.0

 EMMI AG-REG

 Switzerland

 Food

636.50

3405

-46.1

-54.8

-42.3

 FIVE PRIME THERAPEUTICS INC

 United States

 Biotechnology

43.50

1237

-73.1

-100.0

-100.0

 HORMEL FOODS CORP

 United States

 Food

36.27

19180

-41.7

-45.9

-36.7

 IMPERIAL BRANDS PLC

 United Kingdom

 Tobacco

3574.50

34274

-52.3

-96.4

-100.0

 MAPLE LEAF FOODS INC

 Canada

 Food

28.59

4142

-42.8

-77.1

-97.0

 MEDICINES COMPANY

 United States

 Biotechnology

35.47

2511

-80.1

-93.3

-100.0

 NATIONAL BEVERAGE CORP

 United States

 Beverages

47.14

2195

-46.0

-48.5

-35.8

 NEUROCRINE BIOSCIENCES INC

 United States

 Pharmaceuticals

41.27

3585

-70.6

-100.0

-30.9

 RECORDATI SPA

 Italy

 Pharmaceuticals

27.25

5699

-61.7

-52.6

-51.4

 SARTORIUS STEDIM BIOTECH

 France

 Healthcare Products

58.92

5431

-55.1

-72.2

-63.0