What stocks to buy as the yield curve inverted on Monday?

Leisure and recreational stocks tend to outperform following yield curve inversion, says Baird’s Craig Kennison. Yield on the U.S. 2-year Treasury surpassed the one on 10-year today.

Kennison likes Brunswick Corporation

Kennison recommends owning companies with strong balance sheet and a solid buyback programme in this environment. One such name that pops out to him is Brunswick Corporation (NYSE: BC). On CNBC’s “Power Lunch”, he said:

In 2025, their plan is to earn $16 to $17.50. But their downside scenario is they might earn just $6.0 if the market were to correct by 40%. Right now, we’re essentially trading at twelve to thirteen times Armageddon in their scenario. That’s good value.

The senior research analyst couples a price target of $120 on BC that represents a 50% upside from here. The company had its investor day about a month ago.

What else does he like in recreational stocks?

Another name that he likes in the recreational space is Winnebago Industries Inc (NYSE: WGO) down nearly 30% for the year. Making a bull case for the hard-hit stock on CNBC, Kennison said:

Very high-quality company, made number of smart acquisitions. They’re taking share dramatically. Our scenario suggests Winnebago can earn up to $8.0, which is much below what they’re going to do this year. But in that scenario, it’s trading at 8 times; very inexpensive.

He sees a 50% upside in Winnebago as well. Just over a week ago, the American manufacturer of motorhomes reported market-beating results for its fiscal second quarter.

The post What stocks to buy as the yield curve inverted on Monday? appeared first on Invezz.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 All Rights Reserved.

To Top