Folks, I seem to have food on the brain…
A week ago, I showed you that the latest inflation data pointed to canned soup. More specifically, Campbell Soup (CPB) is holding its own against the market…
The S&P 500 Index, our broad measure for stocks, is down around 22% this year. But Campbell Soup is doing much better. It’s up roughly 16% over the same span.
I expect that as long as inflation stays high, consumers will be hungry for budget-oriented foods like canned soup. And the Power Gauge is still “bullish” on Campbell Soup today.
But now, our one-of-a-kind system is alerting us to a new trend…
As it turns out, the Power Gauge thinks we need a drink. And it doesn’t have to be an alcoholic one. In fact, just about any drink will do.
Let me explain…
Regular readers know the Power Gauge analyzes 20 individual factors for each stock in its system. And the proprietary sum of those ratings becomes the unified Power Gauge rating.
On the surface, it’s simple…
More than 5,000 stocks earn a comprehensive grade ranging from “bullish” to “bearish.” But behind that simple output is a mountain of data.
And importantly, we can use that data to broaden our views beyond just single stocks. In other words, we can look for trends in sectors, subsectors, and specific industries.
When I see a trend from a group of stocks… I know something serious is going on.
That’s exactly what I’m seeing in the beverages industry group right now. The rating trend for those stocks is undeniable…
Specifically, the Power Gauge rates 30 stocks in the beverages industry group. And only one of them earns a “bearish” rating today.
On the “bullish” and “very bullish” side, the Power Gauge has flagged eight opportunities. You’ve likely never heard of a lot of these companies. But the Power Gauge knows them.
Zevia (ZVIA) is a perfect example…
In short, the company makes soft drinks and teas sweetened with stevia leaf extract.
In case you didn’t know, stevia is a natural sugar alternative. And the sweetener has helped propel Zevia to a nearly $265 million market valuation today…
Like Campbell Soup, Zevia is outperforming the S&P 500 these days. It’s up about 20% over the past three months. And it earns a “very bullish” rating from the Power Gauge.
Now, as I said, eight companies currently earn “bullish” or “very bullish” ratings from the Power Gauge. And only one earns a “bearish” rating.
You might be wondering what that means for the other 21 companies in the beverages industry group. Well, this is where it gets interesting…
You see, when I developed the Power Gauge, I quickly realized I needed a more nuanced category. That’s where the “neutral” rating comes in.
More specifically, the Power Gauge divides the “neutral” rating into three categories…
-
- Neutral
- Neutral+
- Neutral-
Today, I want to focus on “neutral+.” Stocks in this category have strong setups. The Power Gauge likes them. But at the moment, they’re trading below their long-term trend lines.
In other words, the Power Gauge wants to assign “bullish” ratings to these stocks. But it knows that it takes an uptrend for a stock to truly earn that type of rating.
Right now, the beverages industry group holds 16 “neutral+” stocks. That’s 16 “almost bullish” stocks. The list includes industry heavyweights Coca-Cola (KO) and PepsiCo (PEP).
When you combine that data with the already incredible “bullish” to “bearish” ratio in this industry group, it’s obvious… the Power Gauge is telling us that it’s time for a drink.
So I recommend you take a closer look at this corner of the market today.
Good investing,
Marc Chaikin
Clarification
The October 19 Chaikin PowerFeed essay mischaracterized the refund policies of the ARK Venture Fund.
To clarify, individuals may receive a full refund upon request. However, ARK Investment Management has made it clear that it intends to offer to buy back just 5% of its outstanding shares each quarter.
In other words, ARK Investment Management may not honor the full amount of an investor’s withdrawal request if too many clients ask for their money at the same time. So clients may not have access to all their funds if a lot of folks head for the exits at once
Regardless, we apologize for the error in the published essay.
