With economic growth slow, stocks that are highly economically reliant have not performed especially well. But that may have created opportunities in these so-called cyclical stocks, according to RBC Capital Markets.
One of RBC's top ideas for 2016 is for investors to find "cyclical opportunities."
"Despite the lackluster environment for economically sensitive stocks, we see opportunities to invest in these high-quality cyclical companies, where negative sentiment in their respective sectors have created an undue discount to their longer-term franchise values," a team led by RBC's head of global research, Marc Harris, wrote in the introduction to a recent omnibus research note.
Whirlpool may be considered a classic cyclical name. As the economy improves, more Americans are likely to buy refrigerators, dishwashers and other products made by the company. Because of this tight relationship between the stock and the economy, it indeed tends to gain much more than the S&P 500 when stocks rise, and fall much more when the market drops (as we can deduce from a calculation known as "beta").
In 2015, shares of Whirlpool have fallen by 25 percent.