Consumer staples can find recession demand [Video]

Giles Coghlan LLB, Lth, MA Financial Source

Tyson Foods is a US consumer staples company. It annually exports the largest percentage of beef out of the United States. During recessions, the demand for food still remains, and sometimes discount retailers enjoy a surge of new customers seeking lower prices. The CEO of Tyson Foods, King, has said that their sales volumes are benefitting from competitors' increased prices. Their price elasticity remains below historical levels.

So, as we head into year-end and speculation starts to grow about when the Federal Reserve will announce a pause in rates it could be worth looking at a consumer staple company like Tyson Foods.

Notice how that over the last 15 years, between November 17 and December 9, the company’s shares have gained 11 times for an average of 6.89%.

Major trade risks: The major trade risk here is that previous seasonal patterns are not guaranteed to repeat each year and any negative news for Tyson Foods could invalidate the outlook.

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Author

Giles Coghlan LLB, Lth, MA

Financial Source

Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.

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