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COVID Correction Or Santa Claus Rally? 3 Top Stocks For Any Course

Dec. 01, 2021 6:00 AM ETAlphabet Inc. (GOOG), GOOGL, KO, SAFM46 Comments


  • The year-end "Santa Claus rally" was pushing stock markets higher. But the Omicron variant has other plans.
  • Market cycles can change quickly, and investors should consider stocks that can weather all storms.
  • We'll look at three stocks with great investment characteristics and Quant Grades. These stocks should benefit in either a Christmas Rally or market correction.
  • The stocks featured here, Alphabet Inc., Coca-Cola, and Sanderson Farms, may help you understand why it's crucial to consider our Quant Rating System when markets rotate from irrational exuberance to alarming confusion.
Coca-Cola Christmas Truck

georgeclerk/iStock Unreleased via Getty Images

'Tis the Season For Santa or Omicron?

After Friday's market nosedive driven by Omicron panic and the actions taken by countries to restrict travel, fear is in the air. It was the worst day of the year; the Dow fell 900 points, and the

This article was written by

Steven Cress profile picture
Head of Quantitative Strategies at Seeking Alpha. Data analysis and interpretation have taken center stage in my career. For my purpose, the interpretation of data is the process of making sense of statistics that have been collected, analyzed, and scored. This skill-set has served as a solid foundation for me to identify trends and make transparent predictions in the course of money management. It has also allowed me to develop user-friendly web-based tools that furnish individuals with the indicators and signals to instantly interpret the strength or weakness of a company's value. Importantly, this expertise has helped me build Wall Street trading desks, launch international hedge funds, and construct a SaaS FinTech investment research company. Prior to my role at Seeking Alpha as the Head of Quantitative Strategies, I founded a Hedge fund and Asset Management company (Cress Capital Management), I was the Head of International Business Development at Northern Trust, and the majority of my career was at Morgan Stanley running a proprietary trading desk.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given that any particular security, portfolio, transaction or investment strategy is suitable for any specific person. The author is not advising you personally concerning the nature, potential, value or suitability of any particular security or other matter. You alone are solely responsible for determining whether any investment, security or strategy, or any product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. The author is an employee of Seeking Alpha. Any views or opinions expressed herein may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

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Comments (46)

Omicron is an excuse to take profits, and crush the retail guy.
@I'd buy that stock for a dollar tomorrow or Wednesday maybe they start buying back in after the sale is over. Or. Is this just the start of a longer sale.
@royal options luckily we have fractional shares available 🤪😆
GameBuzz profile picture
Your choice of KO is a good example of how staples stocks can vary as much as tech. KO and PG are worlds apart from underperformers like CAG and CPB which are down for the same period. The current environment is one for individual names rather than sector plays.
Rinse and repeat, no new information.
03 Dec. 2021
Great article and I appreciate not only the data but the author's quips. Thinking and being entertained at the same time kept me reading.
jerseyvalueinvestor profile picture
long GOOGL, thanks for bringing up KO, sold a couple years back at 55, maybe I will re-enter here with growth returning.
Jion profile picture
I don't disagree with the author. Likely these stocks will do better if the market drops, while they will show some gains if it turns back to bullish mode.
But, for the first case, only the special situation stocks will not drop, or at some point they will be disconnected with the market.
A few examples are the preferred stocks like DLNG.PA, and those who are ready to go private at much higher prices like JOBS.
Long KO!!!!!!!!!!!!!!!!!
kas23 profile picture
Am I missing something? SAFM is a head-scratcher here. They are being bought out, so soon won’t exist. Then the company just said that their sales just jumped because of a chicken shortage? What happens once the shortage is resolved?
Steven Cress profile picture
@kas23 I appreciate you reading the article. The cash price for $203 from Cargill and Continental Grain is a 9% premium from the current price. I'll take that return for a 6 month period.
@Steven Cress I share the confusion. If SAFM is being acquired in an all cash deal, why then spend any time or effort analyzing its earnings and growth and whether it will outperform, etc.? Doesn't the buyout price establish its value? Is there any possibility the deal will crater if SAFM doesn't continue to perform well?

Also, the press release says "The transaction is expected to close in the fourth calendar quarter of 2021 or in the first calendar quarter of 2022". Not sure how that squares with your 6 month time frame, or why there is such a spread between current price and the buyout price?
Yes, we will have a Jolly Market since Governments are sending out Millions of checks to U.S. individuals and families.
Buy Physical Gold & Silver NOW as we as a nation continue to debase our Currency and Create Inflation.
Stocks have 50% downside...without Omicron.

The everything bubble is bursting.

Now is the time to sell / hedge.
@Amos Tuck the market is overreacting again just like it did with delta. I’d bet a bacon burger and my crypto account we’re higher then today’s close by Christmas. Buy beaten down quality companies. Here’s one: FNF.
@dsm38 1929 is here
@TheOracle12 well then I’ll do what my great grandfather did…… HOLD AND NOT SELL. He didn’t panic and sell his stocks and made ends meet by making popcorn to sell to the wealthy. Because of his diamond hands, and my grandfather’s diamond hands, my mom inherited a substantial amount of $$. It’s amazing what 1500$ can become with 100 years of reinvesting dividends and smart stock picking. #DIAMONDHANDS
m8 profile picture
01 Dec. 2021
PEP... just delivered it best 1/4ly results ever.?
As a heads-up, it’s a bit difficult for a lot of retail investors to get into a stock that trades at $3k per share. Especially those who might want to do a buy-write.
Ed Grey profile picture
@WhitneyB It's worth it to me to buy one share at a time. I did make money once selling a put that was about to expire, but that was when it was under $2000.

And then one day, maybe they'll split it 50-to-1.
few people have $350K if 1 AMZN written put gets assigned
Doc 224899 profile picture
Not COVID CRISIS. It's OMICRON HYSTERIA, a psychotic hyper-reaction to a non-issue.
@Doc 224899 It's starting to sound like this latest Covid may be a mild Varient.
Let's Cross our Fingers and Hope not to Die.
@Doc 224899 You're right, this one is a non issue. Yes, it's more contagious but all the info out of South Africa is that symptoms are mild. It's not serious at all.
@HereToWin sounds more effective than the "vackseen"
It appears that seller are out in force after Powell day 2 testified in Congress about a faster Taper due to Inflation….

The release of November CPI and PPI could be the start of a “Bear Market” in stocks, as QE comes to a quicker end and interest rate hikes are nearing….

Nasdaq 100 should test 14,500 level in the coming weeks or month…?
@Maverick 2021 I'm with Avi Gilbert.
We may see 4400 S&P and then melt up to 5000 and then 6000 over the next two years.
Let's, "Getter Done" in 2022 & 2023.
The Fed will be selling Bonds at some point.
I'm amazed at how well The Fed has handled this Explosion in Money Supply.
Keep it up Fedchair Powell and the rest of his Govenors.
The USA continues to be the Seat of Capitalizem.
Long live The USA and all other Western Economies.
Ishi Kenjo profile picture
Coke isn't what it used to be. But the others are interesting ideas. 😊
@Ishi Kenjo
Right ,KO up 33% in 5 year’s verses the S&P 500 up 116% , is that where you want to invest? Also, Omnicron has killed 2 people and the effects are mild flue like, where’s the crisis?
@Big Lew Because at some point the market will turn sideways and the S&P will have meager gains. At that point we will all be wishing for dividend stocks.
Ventureshadow profile picture
SAFM will either be bought out at $203 cash very very soon, or the buyout will fail and the stock will react by falling. In either case SAFM is not a conservative long-term investment. I can not understand why you included it in the group above. @Steven Cress

Drinks with high levels of sugar and phosphoric acid (e.g., coca-cola) are being recognized as health risks that when consumed long-term cause dementia and osteoporosis. Maybe you can invest in it long term, but don't drink it Santa.
Darp Research profile picture
" Who isn’t thirsty for a company with this type of track record?" Ah, me. It has a long term dismal negative growth rate, been shrinking for years.

Compare it to DECPF which is growing like a weed (tripled sales in last 3-4 years) on steroids and pays a 12%+ dividend.

Yes they are profitable and have good margins, but a 25 PE for a long term shrinker not appealing to me. And seriously no offense meant. And yes Buffet is in it, but Buffet only has a so so record last 20 years.

mwh27 profile picture
@Darp Research You mean the DECPF trading for $1.33? Yikes.
VanWelij profile picture
@Darp Research I generally don’t trust anything with a 10+ yield trading under $5.
Manzanita Research profile picture
I like KO and GOOG but SAFM barely has a pulse.
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