Consumer staple stocks underperformed broader equity markets last year, but an analyst has identified selective buying opportunities in the sector that he says investors should consider.

Nik Modi, managing director and global co-head of consumer research at RBC Capital Markets, told BNN Bloomberg that it remains “tough to make money” in the consumer staple space – but there are three companies where he sees solid growth potential in 2024.

“We’re not as cautious now but we still lean cautious, because we think fundamentals in the sector are under some pressure,” Modi said in a Friday interview.

“There are bright spots … in this space and in an environment of underperformance, it really comes down to which companies have volume growth and which companies don’t, and that’s really what our top picks are oriented around.”

Modi recommended Constellation Brands (STZ NYSE), Monster Beverage (MNST NASDAQ) and Mondelez International (MDLZ NASDAQ) as his top picks in the consumer staples sector.

Neither Modi, his family, his clients nor his firm hold shares of the stocks listed above. None of the companies mentioned are investment banking clients at his firm.

For the full interview, click on the video at the top of this article.