Are you an active investor in consumer stocks? Are you encouraged by the improving macro environment, the stock market rally, and a positive U.S. job report? If you think this will translate into an improved spending environment, the consumer sector might be of interest to you.
We took a contrarian view, and looked for dividend paying consumer stocks being sold off by institutional investors. We started by looking for consumer stocks with a minimum dividend yield of 1%. This search left us with 19 stocks on our list.
We then researched the 13F’s for all stocks to get the names of institutional sellers of the stock. We focused on those with bearish sentiment from institutional investors, with significant net institutional sales over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform in the future.
We were left with 3 stocks on our list. At first glance, the yields on the stocks look attractive, but further analysis showed us that there are several reasons why money managers might be selling these attractive dividend consumer stocks.
