Just when it looked like it was safe to tiptoe back into the market, wam! Tuesday’s 1.3% drop from S&P500 (^GSPC 1.42%) reminds us that equities are not out of the woods just yet, as the index is seemingly positioned to continue to return the hard-earned gains made earlier in the month.
But a handful of tickers continue to rise, extending the uptrends that have been in place for some time now despite the haphazard market environment. Here’s a look at three such winners who might be worth considering for your investment portfolio in light of their resilience.
You are probably more familiar with national drink (SPARKLING 2.85%) that you realize. This company is the name behind beverage brands like La Croix, Faygo, Crystal Bay Water and a few others. It’s no Coca Cola, but it generated just over $1.1 billion in sales in the fiscal year ending April. This is a 6% increase over 2021 sales, which were 7% higher than the previous year’s sales. And of last year’s revenue, $158.5 million was a net profit despite soaring costs across the board. Although down slightly from the prior year, it’s still better than the 2020 net income of just under $130 million.
Some observers may not immediately understand how this relatively small beverage company has grown so steadily in a field that tends to be dominated by large-scale operators. However, this becomes more evident as one studies the company. National Beverage has found its loyal following in a few niches.
One of them is the space somewhere between regular bottled water and regular soda, where La Croix sparkling water does well. The other niche is unique soda flavors not available from any other brand, such as Faygo’s cotton candy or candy apple. These unusual flavors also come in a variety of package sizes.
Shareholders are rewarded for the company’s success within these segments of the beverage market. Although still down from its early 2021 high, the stock is up 30% from the March low despite the S&P 500’s continued losses. Better yet, after Tuesday’s gains against the market weakness, National Beverage knocks on the door to new multi-month highs.
When investors think of auto parts stores, chains like Auto area, Advanced auto partsand O’Reilly Automotive tend to come to mind. Authentic parts (GPC 2.18%) usually not. It’s just an outfit off the radar.
But maybe it’s not as novel as you might think. Genuine Parts sports roughly the same market capitalization as O’Reilly and AutoZone, and does a similar annual business volume. In total, Genuine Parts Company — the retailer you know better as NAPA Auto Parts — did nearly $19 billion in sales last year, up just over 14% from compared to 2020 turnover.
It should be added that even in 2020, NAPA stores and other Genuine Parts Company stores achieved only about 2% less business than they generated the previous year. That’s not bad, considering the wave of mandatory shutdowns and broken supply chains we’ve all faced in 2020.
The company’s sales and profits are reliable producers, mainly due to the nature of the business itself. People may or may not choose to splurge on luxury clothes or take extravagant vacations, depending on the economic environment at the time. With Cox Automotive reporting that the average new car in the United States now costs just over $47,000, however, vehicle maintenance is an investment rather than an expense.
It is an increasingly priority expense. According to consumer market research firm Cardlytics, spending per customer on auto parts increased by 16% last year, while overall spending on auto parts increased by 8%. This industry-wide pullback is a key reason Genuine Parts Company shares are up more than 10% in the past 12 months, hitting record highs yet again this week.
Finally, add Unilever (UL 0.66%) to your list of tickers pushing through the headwind on a larger scale. Shares of the homewares company have struggled in recent months, but thanks to Tuesday’s rally, their price is now 13% higher than last month’s low and testing the waters for even higher highs. Credit its recent half-year report as well as its optimistic outlook for the rest of the year.
Unilever is the UK manufacturer of Dove soap, Hellmann mayonnaise and petroleum jelly, to name a few. The company was able to generate sales growth of 8.1% in the first six months of the year despite imposed average price increases of 9.8%. That beat analysts’ forecasts for sales growth of just 7.2%. Better still, its previous revenue growth forecast of between 4.5% and 6.5% for this year has been raised, although the company did not provide any numerical details regarding its raised outlook.
There are still credible concerns. Namely, the company’s top brass know that sustained inflation could continue to erode profit margins in the consumer goods industry. Unilever is adapting as needed, however, with a combination of higher prices and lower costs. The longer-term outlook in the half-year report indicates that margins should start to improve significantly in 2023 and continue to do so through 2024.
The kicker: It could have turned into a battle of wills, but during Tuesday’s conference call, Unilever CEO Alan Jope not only acknowledged that activist investor Nelson Peltz is now a board member , but added that he brings a value creation perspective to the table. Activist investor relations can sometimes be contentious, especially when the activist is heavily involved and leads to significant and disruptive reshuffles.
This one appears to be in good health, however, with Peltz and Jope ultimately striving for the same goal. That’s a higher stock price.