Matt Maley, equity strategist at Miller Tabak, said Campbell could be cooking up a comeback.
“I’m going to stick my neck out here and actually call for Campbell’s to do better and it really doesn’t have anything to do with the fundamentals,” Maley told CNBC’s “Trading Nation” on Tuesday. “It’s broken above its trend line going back to the beginning of the year. If it can stay above that, that’ll be positive.”
Maley cautions that the fundamentals outlook for Campbell appears cloudy with the company under the threat of a proxy war. Campbell has reportedly rejected plans to sell itself, which could trigger a fight between activist investor Daniel Loeb and his hedge fund Third Point and the board.
As for GrubHub, Maley believes its rally may have peaked and the stock could see a pullback.
“It is very, very overbought. The stock has basically doubled this year,” said Maley. “The stock’s trying to make a higher high and if it can’t do that, I think a lot of these momentum players will finally take some profits in the name.”
GrubHub’s relative strength index, a measure of momentum, reached an all-time monthly high of 86 in August. Any reading above 70 indicates overbought conditions.
Chad Morganlander, portfolio manager at Washington Crossing Advisors, is also making a bet on a recovery in Campbell over a continued rally for GrubHub.
“This is a typical example of high-momentum stocks versus low-momentum stocks,” Morganlander told “Trading Nation” on Tuesday. “You look at Campbell Soup and all these other staples companies and you see real value there.”
Consumer staples stocks such as Campbell are considered defensive stocks for their low valuation and more consistent growth. Campbell trades at 15 times forward earnings, while the XLP consumer staples ETF has a nearly 18 times multiple. GrubHub trades with a far more elevated 56 times multiple.
“I think that you can get hurt with companies that have high momentum, high multiples at this point in time,” Morganlander said.
GrubHub has added 15 percent so far this month compared with a 3 percent drop for Campbell.
Disclosure: Chad Morganlander and his firm have no positions in Campbell Soup or GrubHub.