In this article, we discuss 5 best counter cyclical stocks to buy now. If you want to read about some more counter cyclical stocks, go directly to 10 Best Counter Cyclical Stocks to Buy Now.
5. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 48
Mondelez International, Inc. (NASDAQ:MDLZ) manufactures, markets, and sells snack food and beverage products worldwide. It is one of the best counter cyclical stocks to invest in. On October 12, Mondelez India’s Sri City factory was awarded the World Economic Forum’s 4th Advanced Industrial Revolution 4IR Digital Lighthouse award. It was one of the first FMCG plants in India which was awarded for digital excellence.
On October 14, Morgan Stanley analyst Pamela Kaufman maintained an Overweight rating on Mondelez International (NASDAQ:MDLZ) stock and lowered the price target to $63 from $70, citing the company’s strong pricing-led organic sales growth amid significant gross margin pressure.
At the end of the second quarter of 2022, 48 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Mondelez International, Inc. (NASDAQ:MDLZ), compared to 48 in the previous quarter worth $1.6 billion.
4. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 49
The TJX Companies, Inc. (NYSE:TJX) operates as an off-price apparel and home fashions retailer. It is one of the top counter cyclical stocks to invest in. On October 17, JPMorgan analyst Matthew Boss maintained an Overweight rating on The TJX Companies, Inc. (NYSE:TJX) stock with an $80 price target, noting that the company historically ranks within the top 10 percentile of consumer discretionary equity performance during an economic slowdown or contraction.
At the end of the second quarter of 2022, 49 hedge funds in the database of Insider Monkey held stakes worth $1.55 billion in The TJX Companies, Inc. (NYSE:TJX), compared to 55 in the preceding quarter worth $1.9 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The TJX Companies, Inc. (NYSE:TJX) was one of them. Here is what the fund said:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included TJX, an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”
3. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation (NYSE:MCD) operates and franchises McDonald’s restaurants in the United States and internationally. It is one of the elite counter cyclical stocks to invest in. On September 13, McDonald’s revealed that it had reached a 15-year virtual power purchase agreement with EDF Renewables North America, a business electricity and gas contractor, in a bid to address its restaurant electricity carbon footprint.
On September 27, Citi analyst Jon Tower maintained a Neutral rating on McDonald’s (NYSE:MCD) stock and lowered the price target to $246 from $275, noting that currency and macro challenges in Europe were looming over the forward Q3 estimates of the firm.
2. Dollar General Corporation (NYSE:DG)
Number of Hedge Fund Holders: 51
Dollar General Corporation (NYSE:DG) is a discount retailer that provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. It is one of the premier counter cyclical stocks to invest in. On October 12, according to a report from Placer.ai, Dollar stores are expected to see increased visits throughout the holiday shopping season as investors control spending.
On September 16, JPMorgan analyst Matthew maintained an Overweight rating on Dollar General (NYSE:DG) stock and raised the price target to $294 from $287.
At the end of the second quarter of 2022, 51 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Dollar General Corporation (NYSE:DG), compared to 53 in the previous quarter worth $2.25 billion.
In its Q2 2022 investor letter, Aristotle Capital Management, LLC, an asset management firm, highlighted a few stocks and Dollar General Corporation (NYSE:DG) was one of them. Here is what the fund said:
“Dollar General Corporation (NYSE:DG) contributed to performance in the second quarter following the report of first quarter earnings that were above expectations. Strength in the second quarter was driven by better-than-expected sales of consumable items. Guidance for the remainder of the year was increased. In addition to solid earnings, forecasts for the increasing expectations of a recession drove positive sentiment towards consumer discretionary companies with more predictable revenue like dollar stores.”
1. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 56
Philip Morris International Inc. (NYSE:PM) operates as a tobacco company working to deliver a smoke-free future and evolving its portfolio for the long-term to include products outside of the tobacco and nicotine sector. It is one of the major counter cyclical stocks to invest in. On September 14, Philip Morris International revealed that it has appointed two former United States Food and Drug Administration officials to key positions with a goal of helping the company in the transformation to smoke-free products.
On October 14, Stifel analyst Christopher Growe maintained a Buy rating on Philip Morris (NYSE:PM) stock and lowered the price target to $105 from $115, noting that the company is expected to show stronger earnings growth across the second half of the year.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Philip Morris International Inc. (NYSE:PM), with 30 million shares worth more than $3 billion.
You can also take a peek at 10 Best MLP Dividend Stocks to Buy and 10 Best Stocks to Buy According to Billionaire Dan Loeb.
