5 Best Counter Cyclical Stocks To Buy Now

4. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 74

The Procter & Gamble Company (NYSE:PG) is an American multinational packaged consumer products company. It is one of the top counter cyclical stocks to monitor. On March 20, The Procter & Gamble Company (NYSE:PG)’s price target was reduced by Deutsche Bank from $162 to $156, but the firm still assigned a Buy rating to the shares. According to Deutsche Bank, there is a growing possibility of economic difficulties affecting the consumer staples industry, which raises concerns about the future performance of many companies they cover. 

According to Insider Monkey’s fourth quarter database, 74 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG), compared to 69 funds in the last quarter. Ray Dalio’s Bridgewater Associates held the largest stake in the company, comprising approximately 5 million shares worth $757 million.  

Rowan Street Capital made the following comment about The Procter & Gamble Company (NYSE:PG) in its Q4 2022 investor letter:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”