NBCI Outlook Forum Bets on Retail & Distribution in 4Q00
Published: Sunday, October 01, 2000
Indeed, all three of our esteemed analysts have placed their professional credibility on the line with bets that 4Q00 holds promise for this subset of NBCI stocks.
“Improving fundamentals should provide
for multiples expansion,” says U.S.
Bancorp Piper Jaffray VP Yudi Bahl.
“We expect strong comps for Whole Foods (WFMI) and believe the weakness in Wild Oats Markets’ (OATS) is overdone,” says Tucker Anthony Cleary Gull Senior VP Carole Buyers. “And United Natural (UNFI) continues to show it’s resilient.”
On the losing side, however, two out of three of our Forum members predict that the Botanicals & Dietary Supplements sector will continue to struggle and underperform the market in 4Q. Only Adams, Harkness & Hill Managing Director Matt Patksy has picked it to outperform the Russell. “It’ll have to,” he says, “because it’s so low.”
How low is low? At the end of June the already lackluster Botanicals & Dietary Supplements sector sub index stood at 51.12. At the end of September it stands at 40.88, down more than 25%.
How did the Forum fare in its predictions for the four NBCI sectors in 3Q00? The tally, as usual, is mixed.
n Food & Beverage garnered two votes to outperform the Russell and one vote to underperform the broader small-cap index. The Russell lost about 2% of its value in 3Q00; the Food & Beverage sub index lost about 4%. The Forum lost its bet on this sector.
n Botanicals & Dietary Supplements got two votes to outperform the Russell and one vote, from the contrary Mr. Bahl, to underperform. Botanicals was down 13.1%. Kudos to Mr. Bahl.
n Consumer & Personal Care received a unanimous vote to perform even with the Russell. And it did. The subsector lost about 2% of its value in 3Q.
n Retail & Distribution got two votes to outperform and one vote to perform even with the Russell. Bahl and Patsky got it right: Retail & Distribution beat the Russell by more than 3%.