Zacks Industry Rank Analysis Highlights: Coca-Cola, PepsiCo, Kao, Revlon and Helen of Troy http://www.zacks.com/

CHICAGO, Oct 29, 2009 (BUSINESS WIRE) -- Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), Kao (OTC: KCRPY), Revlon (NYSE: REV) and Helen of Troy (Nasdaq: HELE) Zacks Industry Rank Analysis is written by Dirk van Dijk, CFA.

This week: Staples Turn to Shine The Consumer Staples sector has the second-best sector rank and the second-best revisions ratio for this year, following only the small and incoherent Conglomerates sector. (Incoherent by their very nature of being conglomerates).

This is largely due to Consumer Staples consistently surprising on the upside in the third-quarter earnings season so far. Among the S&P 500 firms in the sector, there have been 16 positive surprises and only 1 disappointment through last Friday's close.

Not only that, but the sector is actually producing honest to goodness earnings growth. Nothing dramatic mind you, but these companies are seeing positive year-over-year comparisons in distinct contrast to most of the economy. Among the S&P 500 firms, 12 have reported higher earnings than a year ago, while only 5 are lower. Most of the gains, however, have come from better-than-expected margin as there have actually been more disappointments on the top line (7 to 9) than positive surprises. Plus, the majority (5 to 12) have reported lower sales than last year.

While this has been a very successful earnings season for almost all areas of the market, the Staples sector is among the best. For the S&P 500 excluding the Staples, the ratio of positive earnings surprises to disappointments is 5.56:1, which is very strong, but it trails well behind the 16:1 ratio in the Staples sector. Actual earnings growth has been hard to come by outside the Staples sector with a positive growth to negative growth ratio of 0.59, far below the Staples 2.40:1 ratio. (Medical is an exception and has also done well.) Among the 206 industry groups we rank, the four groups from the Consumer Staples sector are in the top 15. The two most important of these are soft drinks, where all the major players like Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) are Zacks #2 Rank ("buy") stocks and none of the 17 firms in the industry have ranks worse than a 3. The firms that are Zacks #3 Rank ("hold") are for the most part bottling companies located abroad.

The Cosmetics Industry is also looking good with only one firm with a Zacks Rank worse than 3 and that is a Japanese firm (Kao (OTC: KCRPY)). Revlon (NYSE: REV) and Helen of Troy (Nasdaq: HELE) are standouts with number 1 rankings.

These steady eddie companies have by and large underperformed in the massive stock market rally since March, and look relatively inexpensive. Given there strong estimate momentum they are worth taking a second look at as possible additions to your portfolio. If the economic recovery were to falter, they would be a good place to hide as well.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2564.

About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin.

The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=2565.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE: Zacks.com CONTACT: Dirk van Dijk, CFA Company: Zacks.com Phone: [phone] Email: [e-mail] Visit: www.Zacks.com Copyright Business Wire 2009 -0- KEYWORD: United States

North America

Illinois INDUSTRY KEYWORD: Professional Services

Finance