Don't Short Consumer Staples

 | Dec 06, 2013 | 3:42 PM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




Clorox (CLX) shows the hazards of short selling great American companies.

Here is a stock that is always getting slammed by the Street because of the company's low growth rate and the competition from bigger companies, but it is extremely well-run and there is always a restructuring lurking. Plus, its Burt's Bees division (originally a very bad overpay) is now leading the growth.

We saw the same thing in Procter & Gamble (PG) today. Heavily shorted. Good bet to roll over in an interest rate spike.

What's incredible to me is that these stocks are very stretched when it comes to historic valuation, but it just doesn't seem to matter.

Perhaps we truly are in a new era in which costs are going down and growth, even slow growth, is loved. Perhaps these two are doing restructurings.

No matter what, if you are going to short these stocks, you have to do it in ETFs. The one the Street hates the most, Clorox, just hit an all-time high.

Miserable short. Great long.

Columnist Conversations

We will take off some more risk, bank some winners SOLD PG OCT 90 CALL AT 3.3 (in at 2.90) ...
After a very calm and sedate period of volatility which saw the VIX fall not only to all time lows but had a r...
today is a good day to lighten the load and take some positions off the table. SOLD WB OCT 85 CALL AT 11 (i...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.