Despite the market's run in recent days since the U.S. presidential election, there are still some values out there for investors, with an eye toward how Millennials are likely to change the U.S. economy.
While these stocks may not seem as exciting as getting a new car or wardrobe under the Christmas tree, they'll likely be more lucrative over time.
"If you look at the consumer confidence numbers in November, they were a lot better than expected and we're at pre-recession levels," said David Yepez, investment analyst/portfolio manager at Exencial Wealth Advisors. "Third-quarter GDP was 3.2%, global GDP, including China, has been positive; we're bullish on corporate tax reform, less regulation, all of which is going to benefit companies in the next couple of years. The market is looking better." Exencial Wealth Advisors has $1.6 billion in assets under management.
Consumer confidence rebounded post-election, with the measure coming in at 107.1, up from 100.8 in October and above the expected reading of 101.2.
Over Black Friday weekend, the National Retail Federation said an estimated 154 million shoppers shopped, spending $5.27 billion on both days, including $3.34 billion spent online. These results show that consumers are willing to spend, which should help drive holiday sales figures higher, a good sign for the economy.
When people tend to think of Millennials (defined as those born in the 1980s or 1990s), urbanization, conservation and unconventional thinking are some of the bigger trends that come to mind. Food seasoning, however, is an overlooked area where young people are changing how we eat.
"One of the things we like about McCormick (MKC) is that restaurants are trying to cut calories and sodium intake, which is being replaced with spices and seasoning," Yepez said.
Shares of McCormick have fallen nearly 7% since the U.S. election, but are up nearly 5% for the year.
As the leader in the industry -- McCormick is nearly four times larger than its nearest competitor -- it's able to do things like invest in research and development, win new contracts (Chick-Fil-A is a recent example) and continue to return cash to investors with its dividend, which has increased annually for the past 30 years.
"The management team has done a good job of showing and providing value to restaurants," Yepez added. "Spices and seasoning represent 10% of the cost of the meal, but 90% of the flavor."
Bank of America Merrill Lynch analyst Evan Morris wrote that the company's organic sales growth has averaged around 3.5% since 2014, compared to peers who are seeing just 0.5% sales growth. Because of Millennials' willingness to spend in this area, the trend could be a boon for McCormick.
"[T]aste is still important and we believe they will increasingly turn to spices and seasonings," Morris penned in a note to clients. "Millennials already on average purchase more spice and seasonings than many other age groups, so this trend could accelerate category growth."
Unlike, McCormick, which investors believe will be a beneficiary of changing consumption habits by Millennials, Disney (DIS) has seen just the opposite reaction.
Because of concerns about those who've cut their cable bills or those who don't have a cable bill at all -- Disney's ESPN family of networks have shed millions of subscribers over the past couple of years -- there has been an overhang on the stock. As a result, shares of Disney have fallen nearly 20% from their peak in November 2015.
"Disney has an opportunity going forward with ESPN, and skinny bundles are an opportunity," Yepez said. "It will find ways to reach new customers and that will give them room to come in and renegotiate contracts. They might have to take a little bit of a discount on ESPN but they will get into the bundles and then reach more people as a result."
Yepez noted the company has a great management team, led by CEO Bob Iger, and has upcoming catalysts such as continued theme park attendance growth and the Dec. 16 release of Rogue One: A Star Wars Story.
Iger has previously said that he doesn't expect Rogue One to do as well as Star Wars Episode VII: The Force Awakens did at the box office, but early tracking figures show it's likely to be one of the biggest movies of the year. Rogue One is on track to generate a $140 million opening box office. JBL Advisors research analyst Jeffrey Logsdon noted there is likely to be "significant trader chatter" around the release, with the analyst expecting its domestic opening weekend to be between $150 million and $160 million.
For contrast, The Force Awakens had an opening weekend of $248 million at the domestic box office, grossing $926 million stateside and just over $2 billion worldwide.
"With great franchises, a great management team, and since shares are selling at roughly 17 times earnings, it will do well going forward," Yepez said.