Consumer-focused companies can be a safety net in tough times because demand for their products persists in both good and bad economic conditions, allowing them to maintain or even grow earnings as other market sectors struggle. That’s why they’re well-represented in Jim Cramer’s Charitable Trust , the portfolio we use for the Investing Club. During Tuesday’s Monthly Meeting for March, Jim ran through what he called the highest quality “safety stocks” in the Trust and stressed their importance. “We are now out of the ‘there’s nothing that can hurt this economy’ mode and into ‘the economy’s about to topple if the Fed doesn’t cut it out’ mode.” He later said, “We have just the stocks for that scenario.” The recent collapse of Silicon Valley Bank and Signature Bank earlier this month has sparked concerns over the health of the U.S. banking system, resulting in a drag on stock prices. The turmoil in the financial sector also added to fears that the U.S. economy could fall into a recession. The big question is whether the Federal Reserve at its May meeting will continue hiking interest rates to rein in inflation or pause. Jim has made the case that a pause (or even a cut) would be appropriate until the true drag of the banking crisis becomes more apparent. Here’s a rundown of the Club’s recession-resistant stocks that Jim recommends. PG YTD mountain YTD peformance Jim called Procter & Gamble (PG) his favorite stock in the portfolio right now. The consumer goods giant is benefitting from falling commodity costs and the dollar dropping since last summer’s two-decade highs. P & G has shown resilience as elevated inflation weighs on consumer budgets. The company has exhibited strong pricing power for its household items that people need to use every day — raising prices without too much of an impact on consumer demand. COST YTD mountain YTD peformance Costco (COST) is one of the best retailers to own in a strained economy. The club warehouse retailer delivered a solid earnings report despite signs of slower sales in its fiscal second quarter . We’re convinced that now is the “seasonably the strongest period to own the stock,” Jim said. Costco’s members-only, volume-based business allows the company to keep prices lower than other retail competitors. Costco’s customer-first mentality allows the Club holding to take market share and deliver reliable earnings even under difficult macro conditions. Other catalysts: a possible special dividend and/or a membership price hike. HUM YTD mountain YTD peformance Humana (HUM) is our managed-care play and we’re holding the stock for its defensive characteristics. The fundamentals of the health insurer are strong due to its durable membership retention and ability to attract new customers. Humana is taking market share from its peers due to its superior Medicare Advantage (MA) offerings. The company reported a strong fourth quarter in early February along with a favorable forward-looking full-year guidance….
Read More: Here are the Club’s 7 ‘safety stocks’ for a volatile economic