The consumer staples sector is on fire! Who is the next domino after$KO (+0,21%) and
$CMG (-0,09%)?
Hello everyone,
Anyone who has been watching the consumer staples sector over the last few days has seen a clear pattern: the big players are delivering a steady stream of earnings beats.
The starting position:
Both Coca-Cola and Chipotle (have massively exceeded expectations. What is particularly exciting is that the share prices not only jumped briefly after the figures, but are holding their level. Starbucks ($SBUX (+0,17%)
) and PepsiCo $PEP (+0,16%)
) have already underpinned the strength of the consumer.
The thesis:
If people continue to spend record amounts on burritos and soft drinks, then the probability is extremely high that the "top dog" of system catering will also have a positive surprise in its quiver. The market still seems to slightly underestimate the resilience of mass consumption.
The trade:
I am planning a sympathy play on McDonald $MCD (+0,12%)
ahead of their numbers on May 07.
- Why: $MCD
has performed rather moderately on "Coke Day" compared to $PEP or $SBUX. In my opinion, there is catch-up potential here (catch-up trade).
- Strategy: Buy a factor certificate (leverage 5x to 8x) to profit from a possible gap-up in the figures.
- Timeline: Entry planned for May 04 or 05 to take advantage of the "run-up" before the figures.
Risks: Of course, playing with leverage ahead of earnings is risky. If the guidance disappoints, even the best sector trend won't help. But after the presentations of $KO, $SBUX and $CMG, the risk/reward ratio (CRV) for the bull side is currently extremely tempting.
What do you think? Is there still room for upside or has the "consumer boom" after the Coke figures already been priced in?
