Healthcare and Consumer Staples Stocks Led the Market. Here Are the Winners Rated ‘Buy.’

By Sean Levine

When investors got nervous about tech this fall, they ran to two places: healthcare and consumer staples.

From Sept. 11 to Oct. 23, the average healthcare stock in the S&P 500 gained 9.6%, and the average consumer staples stock gained 5.5%. Those were the best returns of any sectors in the index.

They were also the two biggest reasons the average S&P 500 stock gained 1.2% despite the tech sell-off.

Both sectors were coming off weak stretches. Healthcare had gained just 0.3% in the previous six weeks, and consumer staples had lost 4.8%.

As a result, healthcare climbed from the third-best sector to first, and consumer staples jumped from sixth to second.

Source: Weiss Ratings, equal-weighted S&P 500 data.

So which companies did the heavy lifting?

Healthcare Got a Booster Shot

Investors rotated out of AI-linked technology and into defensive sectors, and healthcare was the clearest winner.

Leading the way was vaccine company Moderna (MRNA), rated “D-,” a “Sell.” Shares rose sharply after it joined the Nasdaq-100.

Another tailwind was the wait for full results from its cancer vaccine trial. But those results leaked online, showing a smaller benefit than hoped, and the shares fell 21% in a single day.

Even so, Moderna still finished up 39% over our six-week lookback period.

Then there was gene-sequencing company Illumina (ILMN), rated “C,” a “Hold.” The stock rose 31% after analysts raised their targets and investors began to treat sequencing as AI infrastructure.

Drug-research services provider Charles River Laboratories (CRL), rated “D-,” a “Sell,” climbed 24% after an investor day set growth targets and UBS upgraded it.

Meanwhile, life-sciences software provider Veeva Systems (VEEV), “C,” a “Hold,” gained 23% when IQVIA chose its clinical software as an enterprise standard.

And life-science tools firm Danaher (DHR), rated “C,” a “HOLD,” rose 15% after beating profit forecasts and raising its outlook.

The gains were so broad that healthcare still would have gained 9% without Moderna.

Healthcare: Largest Moves

But the safe-harbor trade didn't stop at healthcare.

Stocking up on Safety

Investors also turned back to staples, the classic defensive standby, which had lost ground in the three-straight previous windows.

In fact, Bank of America clients sold a record $14.8 BILLION of individual U.S. stocks in one week, but staples were among their few buys.

Grocery chain Kroger (KR), with a Weiss rating of “C,” or “HOLD,” rose 14% after setting three-year growth targets.

Convenience store chain Casey's (CASY), rated “B,” a “Buy,” matched Kroger to rise 14% after an RBC Capital upgrade, rebounding from a 14% loss in the previous window.

And beverage maker Constellation Brands (STZ), “D+,” a “Sell,” rose 13% after beer shipments grew 5.5% in its fiscal second quarter.

Retail giant Walmart (WMT), rated “B-,” a “Buy,” gained 12% as well after a Deutsche Bank upgrade.

Household products giant Procter & Gamble (PG), rated “C,” a “Hold,” also gained 12% after fiscal first-quarter sales rose 4%.

Then there was Bunge (BG), rated “C,” a “Hold.” The agribusiness firm’s shares fell 16%. That extended extend an 11% loss on rising costs, debt and a JPMorgan price-target cut.

Consumer Staples: Largest Moves

What It Means for You

The hottest stocks aren’t always the best buys. Three of this rally’s biggest winners carry “Sell” ratings from us: Moderna (D-), Charles River (D-) and Constellation Brands (D+).

Moderna shows why that matters. It lost 21% in a single day when its trial results disappointed.

If you want to follow the money into healthcare and staples, stick with the winners our ratings back: Casey’s and Walmart.

Sean Levine

Associate Director of Research

Weiss Ratings

P.S. Casey’s and Walmart both earn a “Buy,” while some of this rally’s flashiest names are rated “Sell.” Weiss Ratings Plus members get a real-time alert when a stock flips to “Buy” for the first time, and our Wall Street’s Danger Zone screener flags new “Sells” as soon as they happen. Click here to see everything Ratings Plus includes.