In preparation for Easter weekend celebrations, the Christian holiday that commemorates the death and resurrection of Jesus Christ, investors may be looking at companies that benefit from egg hunts and other festivities as high inflation, interest rates and the recent bank crisis continue to affect markets.
The National Retail Federation’s annual survey found American consumers will spend, on average, $192.01 this year on everything from church attire, a special meal and candy to cards and flowers. The collective amount of $24 billion is up significantly from $20.8 billion last year.
On the back of these trends, the GuruFocus Aggregated Portfolio, a Premium feature based on 13F filings as of the end of fourth-quarter 2022, found consumer defensive companies that are popular with gurus, as well as the Easter Bunny, include Mondelez International Inc. (MDLZ, Financial), General Mills Inc. (GIS, Financial), Tyson Foods Inc. (TSN, Financial), The Hershey Co. (HSY, Financial) and Cal-Maine Foods Inc. (CALM, Financial).
These types of companies also typically do well in all sorts of market environments as their products are considered necessities. The industries that make up this sector include consumer packaged goods, beverages and farm products, among others.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Mondelez International
With a combined equity portfolio weight of 7.21%, 23 gurus are invested in Mondelez International (MDLZ, Financial).
The Deerfield, Illinois-based company known for its popular Cadbury Eggs and Sour Patch Kids candy products, as well as Oreo and Chips Ahoy cookies, has a $97.34 billion market cap; its shares were trading around $71.40 on Thursday with a price-earnings ratio of 36.43, a price-book ratio of 3.63 and a price-sales ratio of 3.13.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 83 out of 100, the GF Score indicates the company has good outperformance potential. While the profitability, growth and momentum ranks are high, the GF Value and financial strength ratings are more moderate.
Of the gurus invested in Mondelez, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates has the largest stake with 0.21% of its outstanding shares. Elfun Trusts (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Warren Buffett (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies, among others, also have positions in the stock.
General Mills
Fourteen gurus have positions in General Mills (GIS, Financial), representing a combined equity portfolio weight of 2.46%.
The company known for its Pillsbury and Betty Crocker baking products and Cheerios cereal, which is headquartered in Minneapolis, has a market cap of $50.94 billion; its shares were trading around $86.73 on Thursdaywith a price-earnings ratio of 18.73, a price-book ratio of 4.99 and a price-sales ratio of 2.60.
According to the GF Value Line, the stock is modestly overvalued currently.
The GF Score of 74 implies the company is likely to have average performance going forward, driven by a high rating for profitability, middling marks for growth and financial strength and low GF Value and momentum ranks.
With a 0.52% stake, Simons’ firm is General Mills’ largest guru shareholder. Other top guru investors include Dalio’s firm, Gabelli, Mairs and Power (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and John Hussman (Trades, Portfolio).
Tyson Foods
Holding a combined portfolio weight of 7.71%, 14 gurus have positions in Tyson Foods (TSN, Financial).
The Springdale, Arkansas-based processor of chicken, beef and pork products has a $21.32 billion market cap; its shares were trading around $59.95 on Thursday with a price-earnings ratio of 8.91, a price-book ratio of 1.09 and a price-sales ratio of 0.40.
Based on the GF Value Line, the stock appears to be significantly undervalued currently.
The GF Score of 84 means the company has good outperformance potential on the back of high ratings for three of the parameters, a more moderate financial strength rank and low momentum.
Yacktman Asset Management (Trades, Portfolio) has the largest position in Tyson Foods with a 0.82% stake. The T Rowe Price Equity Income Fund (Trades, Portfolio) and Simons’ firm also have notable holdings.
Hershey
Hershey (HSY, Financial) is held by eight gurus with a combined equity portfolio weight of 1.72%.
The confectioner headquartered in Pennsylvania, which manufactures chocolate bunnies and many other popular Easter candy products like Reese’s Peanut Butter Eggs and Whopper’s Robin Eggs, has a market cap of $52.94 billion; its shares were trading around $259.48 onThursday with a price-earnings ratio of 32.60, a price-book ratio of 16.12 and a price-sales ratio of 5.15.
The GF Value Line suggests the stock is modestly overvalued currently.
The company has good outperformance potential with a GF Score of 85. Although the ratings for profitability and growth are high, the financial strength and momentum ranks are more moderate and the GF Value is low.
Holding a 1.30% stake, Simons’ firm is the largest guru investor of Hershey. The stock is also being held by Dalio’s firm, Baillie Gifford (Trades, Portfolio), Mairs and Power (Trades, Portfolio), Grantham, Paul Tudor Jones (Trades, Portfolio) and several others.
Cal-Maine Foods
Six gurus are invested in Cal-Maine Foods (CALM, Financial) with a combined equity portfolio weight of 0.75%.
Producing and selling the eggs necessary for children to dye and the Easter Bunny to hide, the Jackson, Mississippi-based company has a $2.73 billion market cap; its shares were trading around $55.83 on Thursday with a price-earnings ratio of 3.60, a price-book ratio of 1.78 and a price-sales ratio of 0.89.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 81 is driven by high ratings for three of the criteria as well as middling marks for growth and momentum. As such, the company has good outperformance potential.
Diamond Hill Capital (Trades, Portfolio) has the largest stake in Cal-Maine with 3.27% of its outstanding shares. Simons’ firm, Steven Cohen (Trades, Portfolio), Dalio’s firm, Greenblatt and Caxton Associates (Trades, Portfolio) also own the stock.
Other popular picks
Additional consumer defensive companies that were broadly held by gurus as of the fourth quarter included The Kraft Heinz Co. (KHC, Financial), Conagra Brands Inc. (CAG, Financial), Darling Ingredients Inc. (DAR, Financial), Hormel Foods Corp. (HRL, Financial) and Archer-Daniels Midland Co. (ADM, Financial).
