At times underperformance of capital employed on the Street is better than capital erosion: 6 FMCG stocks with upside potential between 16 to 31%

It might appear odd to look at a sector that on the business side is facing headwinds and on the stock market front has been underperforming. But sometimes the rationale goes against owning a set of stocks when a bull run is just starting, the same rationale is applicable for buying the same set of stocks when there is a high risk of a correction in stock markets or when a correction has already started. The logic is that there are times when it is more important to focus on capital preservation even if it is coming at the cost of some under-performance of the capital employed in the short term. The way markets have corrected on Wednesday, it is very clear that bears are around the corner to clear the froth on the street. There is enough evidence to show that when bears are back on the street, they are not able to harm companies and sectors where even if valuations are not cheap the balance sheets and core business are strong. So, it is probably time to bring these old war horses back on the watch list.