Peak Speculation Boring big-caps are where it s at, and SPACs, electric vehicles and the like are not. Let s see what s going on. Stocks quotes in this article: BLNK, XLP
Let me begin by noting something I have noted here before, but probably bears repeating: I think the speculative stocks have peaked. I think what we saw back in January and February was the sort of action that was highly speculative and unsustainable.
That doesn t mean we can t see speculation elsewhere. It doesn t mean we won t see pockets of action similar to that again. But three months ago we saw what I might term a speculative top. We saw SPACs so may special purpose acquisition companies become the flavor of the day. Are there really that many great deals out there that we needed hundreds of SPACs?
Unilever appears to be one of the most under-owned large-cap consumer staples companies.
The new single parent legal structure will have important consequences for the company that owns many of the world’s strongest brands.
While business fundamentals are improving, Unilever still trades below its fair value while offering 3.3% dividend yield.
Almost a year since I first covered Unilever (UL) and took a long position in the company, the company’s share price is still one of the cheapest in the large-cap Personal & Home Care and Packaged Food sectors.
During the period UL underperformed the Consumer Staples sector as measured by the Consumer Staples Select Sector SPDR ETF (XLP).
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Looking for a beaten-down sector of the stock market to invest in? There aren’t many left. As my colleague Robert Rapier noted a few days ago, all 11 of the S&P 500 GICS (global industry classification standard) categories posted positive results during the first quarter of this year.
Energy stocks have been the big winners, up nearly 31% thus far in 2021. The global economy is quickly reopening so there are a lot more cars on the roads. The price of oil has jumped 50% over the past six months.
The Financials sector is also benefiting from increased business activity, gaining 16% during Q1. The same principle holds true for Industrial stocks, which posted an 11.5% return during the quarter.
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