Morningstar

Consumer Stocks to Feast on Amid Heightened Uncertainty

Post-election uncertainty could create attractive buying opportunities amid global consumer names.

Securities In This Article
Anheuser-Busch InBev SA/NV ADR
(BUD)
Coca-Cola Femsa SAB de CV ADR
(KOF)
Starbucks Corp
(SBUX)
Hanesbrands Inc
(HBI)
Procter & Gamble Co
(PG)

Despite the potential for near-term stock market volatility resulting from Donald Trump’s unexpected presidential victory, in general, the longer-term impact is far from clear at this point. Overall, we think heightened levels of uncertainty could create attractive buying opportunities for long-term investors interested in building a position in competitively advantaged global consumer names. Specifically, we believe the election results have not changed the longer-term cash flow profiles of narrow-moat

That being said, we believe investors must be aware of short- and potentially longer-term changes across the broader consumer sector. First, while unlikely to be sustained, we recognize that erratic changes in foreign currency rates are likely to have a near-term impact, particularly for firms with exposure to Mexico (with the peso trading at all-time lows against the U.S. dollar). This list includes

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About the Author

R.J. Hottovy

Sector Strategist
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R.J. Hottovy, CFA, is a consumer strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is responsible for consumer discretionary and staples research. He has covered the consumer sector as an analyst and director of global consumer equity research for Morningstar since joining the company in 2008, and specializes in a broad range of consumer categories including restaurants, footwear and apparel retailers, consumer electronics retailers, fitness clubs, home improvement and furnishing retailers, and consumer product manufacturers.

Before joining Morningstar, Hottovy was a director and senior stock analyst for Next Generation Equity and an analyst for William Blair & Co., specializing in a wide range of retail and consumer product companies. He also spent two years at Deutsche Bank, covering waste management, water utilities, and equipment rental stocks.

Hottovy holds a bachelor’s degree in finance and a second degree in computer applications from the University of Notre Dame, where he graduated magna cum laude. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Institute and the CFA Society of Chicago.

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