'Soup And Cereal' Stocks Are Looking Tasty Now

The consumer staple sector, nicknamed "soup and cereal stocks" for its exposure to food makers, has proven to be the third-worst performing group throughout 2017. But this doesn't mean that investors should stay clear of the group, according to Chad Morganlander, portfolio manager at Washington Crossing Advisors.

There's no doubt many in the soup and cereal group are trading at "depressed levels," Morganlander said during a recent CNBC "Trading Nation" segment. But, if anything, this is distracting investors from many companies in the group that are consistently showing growth and profit, boasting very little debt, all while raising their dividend payments.

As such, now is a good time for investors to "pick up some of the rubble," and may want to consider shares of Dr Pepper Snapple Group Inc. DPS, PepsiCo, Inc. PEP and Anheuser Busch Inbev NV (ADR) BUD.

These are all "quality companies" that are expected to show investors a "substantially higher" revenue and profit regardless of the macro-economic environment, he said.

On the other hand, this is a negative sign for the group, Kathy Lien, managing director of foreign exchange strategy at BK Asset Management said during the same "Trading Nation" segment. Specifically, should the economy continue to grow, aided by tax reform from the White House, investors will find it beneficial to move away from "safety stocks" and into "higher, greater opportunity stocks," like financials and technology stocks.

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