We recently published a list of Recession Resistant Investing: 10 Best Grocery Stocks To Buy Now. In this article, we are going to take a look at where Arko Corp. (NASDAQ:ARKO) stands against other best grocery stocks to buy now for recession resistant investing.

Margin Pressure and the Consumer Staples Sector

On April 24, Bryan Spillane, BofA Securities senior consumer analyst, appeared on CNBC’s ‘The Exchange’ to talk about food stocks and how higher costs are weighing on consumers. He said that the biggest incremental headline right now is that costs are a bigger risk than anticipated going into the recent earnings season. Although there is a lot of focus on revenue risk, costs have taken the lead, and tariff risks are also affecting companies across the consumer staples industry.

Companies are sending marketing messages to consumers saying that they won’t be raising prices, which is something consumers didn’t see during COVID-19. These trends are raising concerns about margin pressures across corporate America. Addressing these questions, Spillane said these companies no longer have the ability to price. If there are incremental costs, whether from tariffs or other sources, they will either come from additional cost-cutting or result in margin pressure. Margin pressure is materializing in some major companies in the consumer staples sector, and it is likely to persist into the next quarter as well.

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Are Consumer Staples A Stable Area Right Now?

These trends raise the question of whether consumer staples are an area of stability amid current market volatility and macroeconomic concerns. Spillane said that this is a very similar dynamic to what we have seen in the last month or so, which is that the stocks have held in relatively well, even though earnings estimates have come down.

He further said that we have to be very selective from here onwards. Consumer staple companies that do not have negative earnings revision risks are a decent place to hide amid the current market dynamics. However, he warned that the fundamentals are decelerating for the consumer staple companies. These stocks are likely to remain under pressure if market fundamentals continue the way they are.

Is a Recession on the Horizon?

We discussed the risks of recession looming over the stock market in a recently published article on 10 Best Stocks That Will Always Grow. Here is an excerpt from the article:

Story Continues

Threats of an impending recession are looming over the stock market due to Trump’s tariffs and macroeconomic uncertainty. According to CNBC’s quarterly CFO Council Survey for Q1 2025, a majority of chief financial officers are of the opinion that the economy is likely to fall into a recession in H2 2025. The CFOs said that they were generally “pessimistic” about the overall state of the American economy, and expressed uncertainty about the stock market.

With the risk of an impending recession deepening, let’s look at the 10 best grocery stocks to buy now for recession-resistant investing.

Our Methodology

We sifted through stock screeners, financial media reports, and ETFs to compile a list of 15 major grocery stocks and chose the top 10 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is ordered in ascending order of hedge fund sentiment.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A busy convenience store with customers stocking up on fuel and merchandise.

Arko Corp. (NASDAQ:ARKO)

Number of Hedge Fund Holders: 21

Arko Corp. (NASDAQ:ARKO) is an independent convenience store operator with four segments: Retail, Wholesale, Fleet Fueling, and GPMP. The company operates its stores under a brand portfolio of more than 25 regional brands, including Admiral, Apple Market, Flash Market, Dixie Mart, 1-Stop, Handy Mart, Jetz, Jiffi Stop, and more.

The company is making considerable progress in its dealerization program, exceeding its initial conversion goal by transitioning over 150 retail stores to dealer sites in fiscal year 2024. Arko Corp. (NASDAQ:ARKO) plans to do the same for over 100 stores by the end of fiscal Q1 2025, reflecting its focus on optimizing its retail operations and ranking it eighth on our list of grocery stocks for recession-resistant investing.

It also attained a 200 basis point improvement in the OTP category’s gross margin in fiscal Q4 2024, further extending the gap between traditional cigarettes and higher-margin OTP products. This highlights Arko Corp.’s (NASDAQ:ARKO) focus on boosting profitability in this segment, which bodes well for its future operations.

Overall, ARKO ranks 8th on our list of the best grocery stocks to buy now for recession resistant investing. While we acknowledge the potential for ARKO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ARKO but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.

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