Reuters  Nov 25  Comment 
Wall Street's three main indexes closed at record highs on Friday, helped by gains in consumer staples and technology stocks as investors hunted for bargains in a post-election rally.
Reuters  Nov 25  Comment 
Wall Street's three main indexes closed at record highs on Friday, helped by gains in consumer staples and technology stocks as investors hunted for bargains in a post-election rally.
Forbes  Nov 23  Comment 
The worst performing sector as of midday Wednesday is the Utilities sector, showing a 0.9% loss. Within that group, American Water Works Co, Inc. (NYSE: AWK) and CMS Energy Corp (NYSE: CMS) are two of the day's laggards, showing a loss of 2.2% and...
Wall Street Journal  Nov 23  Comment 
A nearly 400-year-old fight over water rights is coming to a head along the banks of the Potomac River—and pulling consumer products giant Procter & Gamble into the fray.
Forbes  Nov 22  Comment 
In afternoon trading on Tuesday, Services stocks are the best performing sector, higher by 1.0%. Within the sector, Dollar Tree, Inc. (NASD: DLTR) and Urban Outfitters, Inc. (NASD: URBN) are two of the day's stand-outs, showing a gain of 8.4% and...
Forbes  Nov 21  Comment 
The worst performing sector as of midday Monday is the Financial sector, up 0.3%. Within that group, Extra Space Storage Inc (NYSE: EXR) and AFLAC Inc. (NYSE: AFL) are two large stocks that are lagging, showing a loss of 1.2% and 1.1%,...
The Economic Times  Nov 15  Comment 
Jack Ringquist, global leader for consumer products at Deloitte, says social media has challenged consumer companies to not only put across their message clearly but also to understand what kind of products consumers want.
Forbes  Nov 8  Comment 
The best performing sector as of midday Tuesday is the Consumer Products sector, higher by 0.9%. Within that group, Johnson Controls International plc (NYSE: JCI) and Mondelez International Inc (NASD: MDLZ) are two large stocks leading the way,...


The Toy business leads this category, and by a wide margin. The 3 largest U.S. toymakers, Hasbro (HAS), Mattel (MAT), and JAKKS Pacific (JAKK), were all on the screen for significant periods of time. I think this is another illustration of how the Magic Formula does a lot of the work of digging up beaten down sectors for us. The first quarter is generally a weak one for toymakers, as most of their profits come in the Christmas season (as much as 60%).

The original thought was to separate between Consumer Staples (items that we must buy regardless of our financial condition) and Consumer Discretionary (luxury goods). However, many of the industries above would be ambiguous. For example, we need shoes (making them a staple), but in tight times we may decide to buy a store brand instead of more expensive Nike (NKE), adding a measure of discretion to the purchase. Consumer goods companies can make great long term investments - just ask Warren Buffett, whose investments in Coca-Cola, Anheuser-Busch Companies (BUD), and Procter & Gamble Company (PG) are legendary.

Forces affecting the Retail Industry

Brand is unquestionably the strongest form of competitive advantage in Consumer Goods. However, it's important to also judge the durability of the brand. For example, Coke is a brand known around the world, and has endured over 100 years of competition to still enjoy the top spot in the soda category today. That's a durable brand. Compare this to Gap (GPS).Ten years ago, Gap and it's spin off stores Old Navy and Banana Republic were considered fashionable and chic for the all important teen and college set. Today, the store is avoided by those same groups, lest their fashion sense be ridiculed by friends. That's a fickle brand. It's important to be able to separate a fad from a juggernaut. Add this to the PR problems Mattel faced last year with lead paint, and you have an unwanted sector, with some interesting potential investments.

Distribution is also important in the Consumer Goods sector. A company with a wider distribution network can leverage economies of scale to earn more on their fixed costs. An especially attractive arrangement is when one of these companies has an exclusive deal with a large distributor. Take Anheuser-Busch (BUD), for example. While this firm has an incredibly strong brand, they also require exclusivity from distributors. This allows them to lock out competitors like Molson Coors (TAP) and Miller, protecting profit margins. The soda companies also do this well. Have you noticed that McDonald's (MCD) only sells Coke products, while Pizza Hut (Yum! Brands (YUM)) only sells Pepsi? With these exclusive deals, competitors are blocked from those roads of distribution, protecting profits for the established companies.

Companies in the Consumer Products Industry (346)

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