When Value Stocks Might Make Sense

Growth stocks have had a very big run heading into the upcoming earnings season and we've recently seen a bit of consolidation/selling among these stocks - and it might just continue.

Semiconductors ($DJUSSW) have held up well and continue to push to the upside, but software ($DJUSSW) and internet ($DJUSNS) have both seen some profit taking recently.

Given how overbought many growth areas are right now, we have to recognize that short-term risks are elevated and looking at a few value-oriented stocks might not be such a bad idea.

For example, let's look at MKC:

Enter McCormick & Co. (MKC)

MKC recently reported a slight miss in its quarterly revenues, but did beat bottom-line estimates, .69 vs .65. MKC also raised guidance and Wall Street's reaction saw MKC gap higher from its June 25th close of 73.20 to its June 26th open of 76.54.

Since that time, however, MKC has fallen back and is rapidly approaching a very interesting support level in the 70-71 range. MKC has been out of favor since the pandemic in 2020, but it has an excellent long-term track record, rising most years since its initial public offering in 1994.

MKC pays a nice 2.4% dividend to provide longer-term investors income while they wait for price appreciation to resume.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.