The market continued its recent selloff today as the S&P 500 plunged below the May low like a hot knife through butter, falling over -3% to its lowest level since March of last year. The selling has intensified in the afternoon and if we close at these levels, it will send the S&P 500 into an official bear market.
The VIX index is spiking more than 18%, pushing the ‘fear gauge’ near its highest level in more than a month. Last year, the muted spikes in volatility represented good buying opportunities as a ‘buying the dip’ strategy performed well. But this year is a different story, as volatility has been the one constant. Volatility is here to stay, so it’s a matter of targeting the right sectors and industry groups when choosing optimal investments for your portfolio.
Two defensive sectors that tend to outperform during market downturns are consumer staples and utilities, and we’re seeing that play out right now with both groups faring considerably better than the major indices this year.
Below we will analyze a consumer staple company that is making a series of 52-week highs while most stocks are in bear market territory. This company is a component of the Zacks Food – Meat Products industry, which currently ranks in the top 6% out of approximately 250 Zacks Ranked Industries. Investing in the top-performing industry groups provides a constant tailwind to our investing success. Also note the favorable characteristics for this industry below:
Image Source: Zacks Investment Research
Sanderson Farms, Inc.
Sanderson Farms is an integrated poultry processing company that engages in the production, marketing and distribution of fresh, frozen and minimally-prepared chicken. The company’s product line includes institutional and consumer-packaged chicken items for food service establishments and distributors. Founded in 1947 and based out of Laurel, MS, SAFM operates 11 hatcheries, 9 feed mills, 12 processing plants, and 1 prepared chicken plant.
A Zacks Rank #1 (Strong Buy), SAFM handily beat earnings expectations in the most recent quarterly announcement. The company posted EPS of $14.39/share versus the Zacks Consensus Estimate of $6.81 – a 111.31% surprise. SAFM benefitted from robust execution in Q2 across live production, sales and processing as the top and bottom lines increased year-over-year. Higher demand and prices for food products sold to retail grocery store customers boosted the quarterly results.
SAFM has exceeded earnings estimates in each of the past four quarters. The company is undervalued (5.01 forward P/E) relative to its industry (9.34) and has delivered an average positive earnings surprise of 60.49% over the past four quarters. The stock price has followed suit, advancing more than 23% in the past year.
Sanderson Farms, Inc. Price, Consensus and EPS Surprise
Looking into this year, analysts covering SAFM have revised their full-year EPS estimates upward by 30.01% in the past 60 days. The Zacks Consensus Estimate for 2022 EPS now stands at $40.51, representing growth of 100.51% relative to 2021.
Make sure to keep an eye on SAFM as the stock continues to outperform.
Image: Bigstock
This Staple Is Making 52-Week Highs While the Market Plunges
The market continued its recent selloff today as the S&P 500 plunged below the May low like a hot knife through butter, falling over -3% to its lowest level since March of last year. The selling has intensified in the afternoon and if we close at these levels, it will send the S&P 500 into an official bear market.
The VIX index is spiking more than 18%, pushing the ‘fear gauge’ near its highest level in more than a month. Last year, the muted spikes in volatility represented good buying opportunities as a ‘buying the dip’ strategy performed well. But this year is a different story, as volatility has been the one constant. Volatility is here to stay, so it’s a matter of targeting the right sectors and industry groups when choosing optimal investments for your portfolio.
Two defensive sectors that tend to outperform during market downturns are consumer staples and utilities, and we’re seeing that play out right now with both groups faring considerably better than the major indices this year.
Below we will analyze a consumer staple company that is making a series of 52-week highs while most stocks are in bear market territory. This company is a component of the Zacks Food – Meat Products industry, which currently ranks in the top 6% out of approximately 250 Zacks Ranked Industries. Investing in the top-performing industry groups provides a constant tailwind to our investing success. Also note the favorable characteristics for this industry below:
Image Source: Zacks Investment Research
Sanderson Farms, Inc.
Sanderson Farms is an integrated poultry processing company that engages in the production, marketing and distribution of fresh, frozen and minimally-prepared chicken. The company’s product line includes institutional and consumer-packaged chicken items for food service establishments and distributors. Founded in 1947 and based out of Laurel, MS, SAFM operates 11 hatcheries, 9 feed mills, 12 processing plants, and 1 prepared chicken plant.
A Zacks Rank #1 (Strong Buy), SAFM handily beat earnings expectations in the most recent quarterly announcement. The company posted EPS of $14.39/share versus the Zacks Consensus Estimate of $6.81 – a 111.31% surprise. SAFM benefitted from robust execution in Q2 across live production, sales and processing as the top and bottom lines increased year-over-year. Higher demand and prices for food products sold to retail grocery store customers boosted the quarterly results.
SAFM has exceeded earnings estimates in each of the past four quarters. The company is undervalued (5.01 forward P/E) relative to its industry (9.34) and has delivered an average positive earnings surprise of 60.49% over the past four quarters. The stock price has followed suit, advancing more than 23% in the past year.
Sanderson Farms, Inc. Price, Consensus and EPS Surprise
Looking into this year, analysts covering SAFM have revised their full-year EPS estimates upward by 30.01% in the past 60 days. The Zacks Consensus Estimate for 2022 EPS now stands at $40.51, representing growth of 100.51% relative to 2021.
Make sure to keep an eye on SAFM as the stock continues to outperform.