MPower: Why These Stocks Should Be On Your Watchlist

by Christian Tharp, CMT

The Consumer Staples Select Sector SPDR ETF (XLP) has been very resilient over the past year, rising more than 5% since August 2021. This comes in pretty stark contrast to the S&P 500, which is down more than 6% during the same time period.

Given this strong performance, I wanted to see what names were propping up XLP when it seemed most sectors were just starting to recover. Two names that jumped out to me as stocks to immediately add to my watchlist; Coca-Cola (KO) and Costco (COST), as they account for a significant chunk of this ETF.

First the big-box retailer. I don’t think I have ever met someone who wasn’t a Costco member, and it makes sense why. Everytime I walk in there I am floored by how many different items they have.

A strong brand and great value are the driving forces behind why the store has such a following. This is reflected in the stock price. Over the past year, COST has risen over 25%, again, the S&P 500 is down 6% over this period.

Good news is there could be more room for the stock to run too. During June, COST’s U.S. sales rose as growth has been accelerating. This also comes at a time when competitors such as Walmart (WMT) and Target (TGT) have seen a slow down. All this paints a rosy picture behind the second largest warehouse club operator in the United States, making it a stock on my watchlist.

The second stock that has my attention amid the market chaos, an old classic, Coca-cola (KO). Up over 12% in the past year, KO has proved to be a favorite among investors as a safe place to shield your money from the broader market sell-off. Given the fact that this beverage stock also pays a pretty sweet dividend, and has for decades, it’s no surprise that investors keep going back for refills.

As the rise in U.S. volume shows, the increase in consumer prices has not deterred the masses from purchasing these products.

The combination of higher prices and demand tilt toward strong earnings, which management believes should be boosted by double-digits rates later this year. This strength in a market that has been weak overall is why KO is another stock being added to my watchlist.

As you read these articles, I hope you have begun to get tuned into the market and build out your personal Magnifi watchlist. The idea behind a watchlist is to always know what your favorite stocks are doing up until the point you finally include them into your portfolio.

Start building your watchlist today, so you can build your portfolio tomorrow.

Today’s feature: Consumer Staples

Good luck!

Christian Tharp, CMT

www.todaysbigstock.com 

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