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TheStreet Open House

5 Worst Consumer Stocks May Be Stars in 2012

Stocks in this article: VFC WHR TAP HAS F AVP

(Updated for comment on consumer sentiment.)

NEW YORK ( TheStreet) -- This has been a profitable year to invest in consumer-goods stocks and 2012 may be too, at least for those that have been beaten down.

Consumer-goods shares have generated the second-best returns in the S&P 500 Index this year, rising 11%. Apparel company VF Corp. (VFC - Get Report), which owns the North Face and Lee brands, is the top gainer at 65%. Tobacco companies and food producers also led the benchmark index.

Household-goods and home-construction companies were the poorest performers, increasing only 3%, in line with the broader S&P 500. That's because of the slump in the real estate market. In fact, the biggest laggard in the index was Whirlpool (WHR - Get Report), the maker of refrigerators, and washer and dryers.

The five worst-performing consumer-goods stocks this year are listed below. For some, losses this year have made them attractive, bringing their valuations to historical lows. But, for others, accounting concerns, housing market trends and the global slowdown prevent them from being good investments in 2012.

Consumer sentiment is improving in the U.S., a good sign for many consumer stocks. Today the University of Michigan's consumer sentiment index for December came in at 67.7, well ahead of estimates.

5. Molson Coors Brewing Co. (TAP - Get Report) Company Profile: A brewer that produces Coors Light, Molson Canadian and Carling. 2011 Stock Performance: minus 15.2%

What Went Wrong: High unemployment among core beer consumers, a slowdown in the U.K. (a key market) and commodity inflation. And also an industry trend toward craft beers, wines and spirits.

Is It Worth Owning in 2012? Forty percent of analysts recommend buying Molson Coors, and none has a "sell" rating. Its cheap multiple (11) prices in Armageddon. With a dividend yield of 3% and consistent cash flows, this is a beaten-down stock worth owning in 2012.

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