11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds

In this article, we will discuss the 11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds.

Joe Quinlan, Head of Market Strategy in the Chief Investment Office for Merrill and Bank of America Private Bank, remains constructive on the broader US economy and earnings. The consumers are resilient, and capex, which continues to rise, is expected to benefit from the fiscal stimulus in the federal “One Big Beautiful Bill.”

Food Prices to Rise in 2025

As per the US Department of Agriculture (USDA)’s Economic Research Service, in 2025, overall food prices are projected to rise at about the historical average growth rate. In 2025, prices for all food are expected to rise 2.9%, with a prediction interval of 2.3% – 3.4%. The US economic growth slowed decisively in H1 of the year, according to Charles Schwab. Inflation-adjusted GDP grew at an average of 1.25%, consumer spending increased 0.95% (average), and private business investment increased at an average of 1.55%, the firm highlighted.

Amidst such trends, we will now have a look at the 11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds.

Our Methodology

To list the 11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds, we used a screener to shortlist the stocks catering to the broader consumer cyclical sector. Next, we chose the ones popular among hedge funds. Finally, the stocks are arranged in ascending order of their hedge fund sentiments, as of Q2 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds

11. Dillard’s, Inc. (NYSE:DDS)

Number of Hedge Fund Holders: 22

Dillard’s, Inc. (NYSE:DDS) is one of the Best Consumer Cyclical Stocks to Buy According to Hedge Funds. On August 15, Telsey Advisory lifted the price objective on the company’s stock to $550 from $450, while keeping a “Market Perform” rating, as reported by The Fly. As per the analyst, the company seems to have regained the momentum after 4 consecutive quarters of healthy results. Furthermore, as per the firm, while Dillard’s, Inc. (NYSE:DDS)’s Q2 2025 results demonstrate its ability to execute well amidst the shifting macro-economic conditions, there are structural pressures in the department store landscape.

In Q2 2025, Dillard’s, Inc. (NYSE:DDS)’s total retail sales rose 1% YoY, with net income coming at $72.8 million as compared to $74.5 million. Total retail sales (which excludes CDI) for the 13 weeks ended August 2, 2025 and August 3, 2024 came in at $1.447 billion and $1.426 billion, respectively. The retail gross margin for the 13 weeks ended August 2, 2025 stood at 38.1% of sales as compared to 39.1% of sales for the 13 weeks ended August 3, 2024. As compared to Q2 2024, the retail gross margin rose moderately in shoes and in ladies’ accessories and lingerie. However, the retail gross margin declined slightly in men’s apparel and accessories and fell significantly in ladies’ apparel.