Oversold Consumer Stocks Are Opportunities

The AI boom led the way last year. But the fact is, many “left for dead” companies offer big value opportunities.

Oversold Consumer Stocks

One area this is true is the consumer discretionary sector. There’s a rotation happening under the surface of the market, and this sector could play a big role in 2026’s overall course.

The 2026 advice is to be open to oversold, unpopular names. There are many high-quality, oversold consumer stocks that suffered in late 2025.

Buying Opportunities

Not all stocks enjoyed big gains like technology and AI companies that drove the S&P 500 (SPX) higher. Plenty of real-world companies have taken a backseat – and this is where value can be found.

One is Lululemon Athletica, Inc. (LULU), the athletic wear company with a $24 billion market capitalization. It was beaten to a pulp last year and recently replaced its CEO.

MoneyFlows data shows rock-solid fundamentals and a dragging technical rating:

The company is healthy but has been penalized technically. However, it’s picking up some bullish signals:

Another value-oriented consumer discretionary stock is Deckers Outdoor Corporation (DECK). Deckers distributes footwear and accessories, including popular brands like HOKA and UGG.

The $15 billion market cap company trades at a reasonable price after being hammered in the market – notice the strong fundamentals:

So, the fundamentals are there, but the price action is not. This divergence presents an opportunity.

DECK is primed for a rebound. It just needs a positive catalyst to get going.

A third oversold consumer stock is bulk retailing titan Costco Wholesale Co. (COST). The company operates membership warehouses primarily in the U.S. and Canada.

From an equity perspective, COST is a $382 billion market cap company with a storied history of outsized gains. In the last five years, it beat the S&P 500, gaining 148% versus the market’s 95% rise. Plus, per-share earnings doubled over that time (from $9.02 to $18.21) and the company has grown its dividend for more than 20 years.

But it’s been slammed recently:

Shares have slid for months. Also, there have been no inflows:

This is an all-star stock that’s been largely ignored by investors over the recent past. Given the solid nature of its outperforming business, it seems it cannot last forever.

Thrive In 2026

Sometimes looking outside of popular themes can present alpha. So, keep the discretionary space on your radar. January is a wonderful time to sharpen your investing toolset since rotations tend to occur early in the year.

MoneyFlows can help you thrive in 2026. Market leadership is rotating. Find the new leaders before 2026 takes off.

If you are a Registered Investment Advisor (RIA) or a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights.

Disclosure: the author owns LULU and COST in personal and managed accounts and holds no position in DECK at the time of publication.