As market volatility makes a comeback to the TSX Index, now seems like a decent time to load up on some of the defensive names out there, some of which may have been neglected in favour of the higher-risk types of plays. Undoubtedly, with the cryptocurrency markets booming alongside the tech scene, it’s tempting to take some of the boring, less-choppy defensive plays and stash them in the hottest new artificial intelligence (AI) stock on the block.
As the momentum trade gets a tad flatter going into the second half, however, I’d encourage investors not to overweight their portfolios in any single sector, most notably tech. Indeed, you don’t need to get in tech to score decent market gains as the rally begins to broaden out to other corners.
Loblaw stock: A boring defensive that’s posted exciting returns of late
Loblaw (TSX: L) stock is one of the consumer staples stocks that’s actually been on an incredibly hot, almost AI stock-like run of late, surging by around 16% year to date and just north of 20% over the last 12 months. Indeed, of all the inflation-resilient companies out there, it’s tough to name one that’s as durable as Loblaw, especially as it looks to keep in the many cost-conscious consumers it won over the last two years of inflationary pressures.
Undoubtedly, Loblaw, the grocery giant behind such names as Superstore and No Frills, has been known for its competitive prices. However, of late, some shoppers have grown a bit tired of the price hikes. If anything, the local Superstore may not be the cheapest place in town to go for one’s groceries anymore. Of course, trading down to private labels is a fantastic way to save a couple of bucks.
Seek savings? Look no further than No Name!
On that front, Loblaw has done a great job with its No Name and President’s Choice brand names. The former brand is unmistakable with its plain yellow packaging and incredibly low prices compared to branded competing products.
Though inflation has retreated quite a bit, don’t count on shoppers to stop flocking over to the local Loblaw-owned store. If anything, grocery prices remain incredibly high. And as long as we’re still getting sticker shock at the till, expect people to stand by the private-label brands they traded down to amid tightening consumer budgets.
Though the competitive pricing of Loblaw-owned stores is up for debate, I think it’s hard to argue that No Name is synonymous with value and savings. With the brand setting its sights on the telecom scene, Loblaw may very well have another means to keep revenue growth moving higher over the coming years. No Name mobile plans are coming to the local No Frills store, providing its cost-conscious customers with yet another means to save a great deal on their monthly expenses.
No Name mobile looks intriguing
The low-cost No Name plan will reportedly run on Bell Canada’s network — a subsidiary of BCE — but will only offer 4G data at the time of launch. In any case, I think the No Name mobile plans will be a hit as cellphone users look to save money wherever possible.
With mobile plans, customers have yet another means to “trade down” in an effort to stay afloat amid rampant inflation. I think the No Name plan could be a hit, given the brand’s reputation as a means of saving a boatload of cash at the local Loblaw-owner Superstore.
