Worries surrounding a disappointing employment report and tight supply chain could fuel stock market volatility this month. In such an environment, we believe that betting on consumer defensive stocks, which usually exhibit defensive qualities due to the relatively inelastic demand for their products, could be a good strategy to hedge one’s portfolio. Given the continued increase in consumer spending and market volatility, we think undervalued consumer defensive stocks USANA Health Sciences (NYSE:USNA), Nature's Sunshine (NATR), and LifeVantage (NASDAQ:LFVN) could be ideal picks now. So, let’s examine these names.A weaker-than-expected employment report, rising inflationary pressure, and concerns surrounding global supply chain issues continue to drive wild swings in the stock market. Also, the market will likely see more volatility going forward because the Fed is expected to tighten its monetary policy. Against the backdrop, shares of consumer defensive companies, which benefit from relatively inelastic demand for their products, could offer stable returns.
Moreover, despite a surge in inflation, U.S. consumer spending rose 0.8% in August as COVID-19 cases declined. This should bode well for consumer defensive stocks.
So, we think it could be wise to bet on quality stocks from this space USANA Health Sciences, Inc. (USNA), Nature's Sunshine Products, Inc. (NATR), and LifeVantage Corporation (LFVN), which appear undervalued at their current price levels.