Why You Should Stay Away From These 3 Stocks Even as They Rally During the Market's Swoon

Core Viewpoint - The recent drop in the Nasdaq Composite and S&P 500 has led investors to seek safer investments, particularly in consumer staples, but not all consumer staples stocks are advisable to buy now [1] Group 1: Consumer Staples Overview - Consumer staples companies provide essential products that consumers regularly purchase, making them generally viewed as safer investments during economic downturns [2] - Over the past month, the average consumer staples stock has declined less than the S&P 500 or Nasdaq Composite, indicating relative stability [3] Group 2: Company Performance - PepsiCo has outperformed the average consumer staples stock, with a 2.6% increase in value over the past month, while the average consumer staples stock has decreased by 2.6% [3] - In 2024, PepsiCo reported a 2% rise in organic sales and a 9% increase in adjusted earnings, demonstrating solid business performance despite previous inflation-driven price hikes [4] Group 3: Stocks to Avoid - Kraft Heinz is struggling, with organic sales in its key segment declining from a 0.5% increase in Q1 to a 5.2% drop in Q4 of 2024, indicating it is not a safe investment despite a 5.3% dividend yield [6] - Conagra's organic sales rose only 0.3% in Q2 of fiscal 2025, while adjusted earnings fell 1.3%, raising concerns about investing in its second-tier brands despite a 5.4% dividend yield [7] - B&G Foods offers a high dividend yield of over 10%, but its acquisition-driven model has resulted in a heavy debt load, making it a risky investment despite the attractive yield [8]