In light of rising coronavirus cases around the globe, four consumer defensive stocks with solid revenue growth over the past 10 years are Monster Beverage Corp. (MNST, Financial), Boston Beer Co. Inc. (SAM, Financial), Herbalife Nutrition Ltd. (HLF, Financial) and Usana Health Sciences Inc. (USNA, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
Dow sinks more than 700 points as coronavirus cases stoke fears
On Monday, the Dow Jones Industrial Average closed at 33,962.04, down 725.81 points from Friday’s close of 34,687.85 on the back of Covid-19 cases increasing in several parts of the globe.
According to data from the Centers for Disease Control and Prevention, the U.S. is averaging approximately 30,000 new cases per day during the seven days since Friday, up from a seven-day average of approximately 11,000 new cases per day in June. Morgan Stanley (MS, Financial) chief U.S. strategist Mike Wilson said in a note that the market “appears ready to take on a more defensive character” as earnings and economic growth start decelerating. Wilson added at consumer staples stocks may have potential to “weather the decline.”
As such, investors can find opportunities in well-established consumer defensive stocks with solid revenue growth. Legendary Fidelity Magellan Fund manager Peter Lynch defined a stalwart as a large, established company that still has good long-term growth potential. Key criteria for stalwarts include consistent revenue and earnings growth and a 10-year revenue growth rate of between 10% and 20%.
Monster Beverage
Shares of Monster Beverage (MNST, Financial) traded around $92.24, showing that the stock is fairly valued based on Monday’s price-to-GF-Value ratio of 1.09.
GuruFocus ranks the Corona, California-based energy drink company’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that has increased approximately 3.3% per year on average over the past five years and is outperforming more than 97% of global competitors.
Gurus with large holdings in Monster Beverage include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.
Boston Beer
Shares of Boston Beer (SAM, Financial) traded around $945.88, showing that the stock is significantly overvalued based on Monday’s price-to-GF-Value ratio of 1.32.
GuruFocus ranks the Boston-based beer company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and returns outperforming more than 88% of global competitors despite operating margins declining approximately 4.4% per year on average over the past five years.
Gurus with holdings in Boston Beer include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management.
Herbalife Nutrition
Shares of Herbalife Nutrition (HLF, Financial) traded around $50.60, showing that the stock is modestly undervalued based on Monday’s price-to-GF-Value ratio of 0.79.
GuruFocus ranks the nutrition products company’s profitability 8 out of 10 on the back of a 3.5-star business predictability rank and profit margins and returns outperforming more than 79% of global competitors.
Usana Health Sciences
Shares of Usana Health Sciences (USNA, Financial) traded around $99.78, showing that the stock is fairly valued based on Monday’s price-to-GF-Value ratio of 1.03.
GuruFocus ranks the Salt Lake City-based packaged product company’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that has increased approximately 0.8% per year on average over the past five years and is outperforming more than 80% of global competitors.
