When sellers consistently hit bids in a market that trends higher, you actually get two winners. The sellers, of course, who are selling into strength, and the bids for them are reasonably abundant and liquid, but there is another winner. For the long-term stock investor, consistent selling is also a contrarian indicator, and despite the S&P 500 creeping back over the 2,100 level for the first time since April, a true wall of worry seems to exist.
In a new research note, which really echoes what they have said for some time now, the Merrill Lynch equity and quantitative strategists note that their clients were sellers of U.S. stocks for the 18th consecutive week, which they say is the longest uninterrupted selling streak in their data history. Institutional clients, along with private clients and hedge funds, were all net sellers.
From a contrarian standpoint that is good as bull markets usually end on massive speculation and froth, and with clients literally selling almost all year, that is hardly speculative or frothy. We screened the Merrill Lynch research universe for safe dividend paying stocks that are rated Buy for investors to consider.
This company remains a top Warren Buffet holding and offers not only safety, but an incredible strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, its portfolio features 20 billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade and Minute Maid. Globally, it is the top provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy its beverages at a rate of more than 1.9 billion servings a day.
Despite reporting better than expected first-quarter results, the stock was hit as many portfolio managers were overweight consumer stocks, and the market noted that the company’s multiple had jumped higher than peers. It is important to remember though that the company own 31.5% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola investors receive an outstanding 3.13% dividend. The Merrill Lynch price target for the stock is $52, and the Thomson/First Call consensus price target is $47.50. The stock closed Wednesday at $44.70.
This top retailer has been pounded and could be offering investors a solid entry point. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States. It offers private label, exclusive and national brand apparel, footwear, accessories, beauty and home products to children, men and women customers. The company also sells its products online at Kohls.com and through mobile devices. As of March 03, 2015, it operated 1,162 department stores in 49 states.
The company recently got a ton of free social media marketing and advertising when a Texas mom’s crazy internet post wearing a Chewbacca mask that she bought in a bargain bin at the store went incredibly viral. The clip has been seen by 135 million people as of Monday morning, making it the most watched video ever on Facebook. Kohl’s sent representatives to her house with a trove of gift cards and other items, and of course, more Chewbacca masks for the kids. Only 8.8% of funds own the stock.
Kohl’s shareholders are paid a huge 5.55% dividend. Merrill Lynch has a $42 price target for the stock, and the consensus target is posted at $41. The stock closed most recently at $36.17 a share.