This year's market volatility is taking the swagger out of equities, but consumer stocks are outperforming the broader markets to date.
The S&P 500 Consumer Discretionary Index is down 5.9% this year, as of this writing. Consumer staples stocks within the S&P 500 are relatively flat for the year. Both sectors are performing better than the S&P 500, which is down 6.3%, at a recent check.
Deutsche Bank is bullish on three specific retail stocks.
"Thematically, the low-end is working in this volatile backdrop, with Walmart and the dollar stores consistently in the green of late," Deutsche Bank analyst Paul Trussell wrote in a note to clients on Tuesday. "We acknowledge the 'improved prospects' of their core customer, but remain selective at current valuations. Instead, our best ideas are proven winners in their sector, each outperforming peers on the top-line. We argue that these trends are sustainable and underappreciated at current multiples, especially with catalysts ahead."
Check out the list of Deutsche Bank's favored retail stocks. We've paired the company with commentary from Jim Cramer, if the stock is owned by his Action Alerts PLUS Charitable Trust Portfolio.