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The Consumer Staples Select Sector SPDR Fund ETF (NYSEARCA:XLP), with 5.8% weightage on the S&P 500, bagged a gain of ~2% in Q2, compared to broader market (SP500) gains of ~4.6%. Consumer staple (XLP) was the fourth-best performer in Q2, only lagging behind technology (XLK), utilities (XLU), and communications sectors (XLC).
The XLP Fund (XLP) has about $15.8B in AUM and saw a net inflow of $18.4M in Q2, versus SPY’s (SPY) net outflow of $15.6B in Q2.
Q2: Best and worst performers
The best-performing staple stock in Q2 was Costco Wholesale (NASDAQ:COST), up 16% after impressive Q1 results. Walmart (NYSE:WMT) and Philip Morris (PM) gained about 12.5% and 10%, respectively, in Q2. However, Walmart’s (WMT) CFO recently spooked investors with comments like, “Not every quarter is going to be as good as the last quarter.”
Other gainers included Keurig Dr Pepper (KDP) and Colgate-Palmolive, which were up 8.9% and 7.6%, respectively, in Q2.
The worst-performing stocks were Estée Lauder Companies (EL) and Molson Coors Beverage (TAP), down 31% and 24%, respectively. Among others were Lamb Weston (LW), Dollar Tree (DLTR), and Target (TGT) that dropped 21%, 19%, and 16%, respectively.
A look at Quant rating
Tyson Foods (TSN) has the highest quant rating score of 4.75, with the highest factor grades given to revisions; beverage giant Coca-Cola has a rating of 4.58 with the highest factor grade to profitability.
The lowest quant rated stocks were Lamb Weston (LW) and Brown-Forman (BF.B) with scores of 2.01 and 1.89, respectively, with lowest factor grades given to valuation and revisions.
The broader Consumer Staples Select Sector SPDR Fund ETF (XLP) gets a quant score of 3.15.
Industry-wise
The S&P 500 Food Beverage & Tobacco Index dropped ~1.1%, while S&P 500 Food & Staples Retailing Index gained ~6.2% and Household & Personal Products Index gained ~0.24%.
Analyst comments
Talking about consumer staples performance, J.P. Morgan analyst Mislav Matejka wrote, “This, along with foreign exchange and some margin beats, have prompted our sector analysts to upgrade their EPS growth forecast by 2%, and expect further acceleration in Q2. They expect margins to improve this year, on clear volume recovery and on declining COGS (cost of goods sold).” after witnessing stronger Q1 with improved volumes and resilient pricing.
Seeking alpha contributor Hawkinvest commented, “These types of companies are typically recession-resistant, and with cracks developing in the economy, this ETF could offer strong relative performance going forward.”
Other consumer staple ETFs: (VDC), (FXG), (IYK), (KXI), (VDC), (FSTA), (PSL)