Equities in the consumer goods sector have been thriving. The returns that some of the stocks in this space have churned out are all the more impressive in light of the relatively weak consumer confidence that has served as a backdrop. Here are four dynamic consumer goods stocks right now.
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The Cash for Clunkers program has propelled sales of domestic automobiles and Ford (NYSE:F) has been a big winner in the process. Having already emerged as best in breed among the Big Three, the company is continuing to gain market share and reverse its fortunes. One of the top selling models in the clunkers program has been the Ford Fusion which recently set a July record for the model with a 66% increase in vehicles sold compared to a year ago.
Shares of Ford have already risen 257% this year and have yet to show any signs of a let up. The company is now hoping that the Senate will add another $2 billion to the clunkers program to further stimulate sales. The company is also planning for the long-term as it now plans to expedite its product rollout by giving a makeover to between 70-90% of its vehicle lineups by volume by 2012.
The glass container manufacturer Owens-Illinois (NYSE:OI) recently topped analysts' earnings estimates with its Q2 results, despite acknowledging the negative impact the global recession is having on the company's business. Owens-Illinois has responded to this resistance with a successful $600 million bond offering and by temporarily adjusting production levels. The company has also been moving to reduce its fixed costs by shifting its operations from higher cost plants to more efficient facilities. OI is up 26.7% year-to-date.
Atop the Mountain
One consumer goods stock that has remained virtually unharmed throughout the recession is Green Mountain Coffee Roasters (Nasdaq:GMCR). The stock has gone pretty much straight up and has already climbed 162.4% this year. In the company's most recent quarter EPS grew by 125.0% on a 61.3% pop in net sales on a year-over-year basis.
The company's Keurig single-cup brewers continue to experience a torrid pace of growth. Q3 sales were up 187% versus the year-ago quarter. Two other plays in the coffee space that are also at or near 52-week highs like GMCR are Starbucks (Nasdaq:SBUX) and Caribou Coffee (Nasdaq:CBOU). McDonald's (NYSE:MCD) has also seen opportunity in the coffee arena and has been expanding its platform with its McCafe espresso-based coffee drinks. (To learn more about 52-week highs, read our Market Breadth Tutorial.)
The appliance manufacturer Whirlpool (NYSE:WHR) suffered double-digit EPS and revenue declines in Q2 compared to the company's year-ago quarter. Going forward, the picture is not as bad as previously expected. The firm upped the lower end of its full year guidance for 2009 as its cost-saving initiatives have begun to gain traction. Also, a government incentive plan has driven sales of appliances 28% higher in the company's Brazilian market. Shares of Whirlpool have risen 39.5% so far this year.
The Bottom Line
Consumer goods stocks have been lighting up across the board. These four names have been among the hottest names in the sector in recent weeks and have pushed investor expectations considerably higher. From here, it will be interesting to see whether these companies will continue to persevere in the face of adversity or if they will be dragged back down to earth.
Be sure to read our related article Using Consumer Spending As A Market Indicator to see how you can use what people buy and where they shop to garner valuable information about the economy.