Do you expect U.S. economic growth to continue moving higher? One way to gain exposure to economic activity is with consumer goods stocks. These companies gain the majority of their revenues through consumer spending, which incidentally comprises around 70% of economic activity in the U.S.
For ideas on how to analyze the industry, we ran a screen beginning with consumer goods stocks rallying above their 20-day, 50-day, and 200-day moving averages, indicating that these stocks have upward momentum that may persist.
We then screened for impressive profitability, with higher gross, operating, and pre-tax margins than the industry averages.
Finally, we screened for those with strong sales trends, comparing growth in revenue to changes in inventory year over year. We screened for companies seeing higher growth in revenue than inventory over this time period, as well as inventory comprising a decreasing portion of current assets.
Business section: Investing ideas
Below are the final results of this screen. These consumer goods companies currently have strong market sentiment and are rallying above their moving averages. They also have superior profitability and positive trends in sales relative to inventory.
Do you think these companies will continue to benefit as the U.S. economy recovers? (Click here to access free, interactive tools to analyze these ideas.)
1. Estee Lauder Companies
3. Jarden Corp.
4. Philip Morris International
5. Shuffle Master
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Data sourced from Google Finance and Finviz.