• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Consumer Staples

Who Is Cheap Now?

These two companies usually get hammered more than most when the market pulls back.
By JONATHAN HELLER
May 21, 2012 | 02:30 PM EDT
Stocks quotes in this article: HUN, CRESY

The weekend sunshine and great weather for baseball was a temporary respite from the fact that there's been an ugly mood in the markets the past couple of weeks.

Even the much-heralded Facebook (FB) IPO could not lift its spirits (although it may have demonstrated that valuation still matters). This is nothing. Six-straight negative days for the S&P 500, yet there were just three trading sessions in the past month with losses greater than 1%. How quickly we forgot the volatility of last August/September, when the index closed up or down more than 1% in nearly 2/3 of the 44 trading days. Included in that two-month stretch were 18 days of moves that were plus or minus at least 2%. I'm not relishing a return to that type of environment, just putting the current environment into perspective. 

Along with the carnage, if you can indeed call this carnage, comes potential opportunity. The pond where I typically fish includes names that typically get hammered much harder than the broad markets during a pullback. Huntsman (HUN), for instance, is down more than 17% since the beginning of May. With nearly 70% of 2011 revenue coming from overseas, including 11% from Germany and Italy, you can understand some skittishness here. But I'm happy to collect the 3% dividend while the market figures out whether Huntsman deserves more punishment. At less than 9x trailing earnings and 5x times EV/EBITDA, I'm staying put.

Another name that's been hammered, but for other reasons than just the recent pullback, has been Argentine farming and asset play Cresud (CRESY).  I warned about this one last month, due to Argentina's move to nationalize YPF, that nation's largest oil and gas company. Cresud shares are down nearly 30% since then and now I'm getting interested again. While it's unlikely that Argentina would also attempt to nationalize the food and farming industries, I simply require a greater margin of safety in Cresud shares in order to take on the risk. With the YPF nationalization, Argentina is screaming loud and clear that it is not a friendly environment for business, or capitalism. If I'm going to purchase assets there, it has to be on the cheap, the very cheap. 

I was not comfortable with Cresud at $10, but at $7 and change I'm getting there. The company's 64.2% stake in Argentine real estate play IRSA (IRS) is alone worth about $290 million. Unless Argentina decides to nationalize that industry, too. Stay tuned.  

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, the author had no positions in any of the securities mentioned.

TAGS: Investing | U.S. Equity | Consumer Staples | Emerging Markets | Markets

More from Consumer Staples

Target Is Taking Aim at Lower Share Prices in the Weeks Ahead

Bruce Kamich
Sep 26, 2023 11:01 AM EDT

Here's what investors and traders need to know.

I'm Trading Smucker's Jelly for Some 'Sprouts'

Ed Ponsi
Sep 26, 2023 9:30 AM EDT

The organic food grocer Sprouts Farmers Markets is trouncing consumer stocks, and its 30.34% year-to-date gain beats the overall market.

Thanks to Hostess, I've Lost My Appetite for Smucker

Ed Ponsi
Sep 14, 2023 1:00 PM EDT

Clearly, Wall Street doesn't like this deal.

A Stock to Own for the Rest of This Year, and Beyond

Ed Ponsi
Sep 13, 2023 10:00 AM EDT

I went looking for a stock that's technically strong, and a business that stands to benefit from consumers' desire to spend less on essential items. I've found just the name.

Here's What Caught My Eye on Monday's Rally

Helene Meisler
Sep 12, 2023 6:00 AM EDT

These three sectors got a boost, and I can't just rationalize why. Let's take a look.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:20 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading in Multiple Time Frames
  • 10:24 AM EDT BRUCE KAMICH

    This Could Get Messy

    A number of key stocks are getting close to import...
  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

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

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.

FactSet 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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login