Considering it is allegedly a slow-moving group, the consumer staples sector has had action-packed 2014.

The sector was noticeable laggard at the start of the year with the Consumer Staples Select Sector SPDR (NYSEArca: XLP), the largest staples ETF, tumbling almost 6% before bottoming on Feb. 3. Year-to-date, XLP is up 5.4%, aided by a second-quarter gain of about 4.5%. [Problems for Staples ETFs]

The sector’s rebound has been undoubtedly impressive, but the downside is valuations are looking somewhat frothy, a scenario that should be ignored because staples often trade at a premium to the broader market.

“The sector’s P/E multiple has expanded considerably since the financial crisis, outpacing the recovery in multiples for the broader S&P500, and it remains at the top end of that range. As a result we think Consumer Staples is less attractive than the S&P500 going forward,” according to a new research note from AltaVista Research.

AltaVista rates XLP underweight, though that is not the equivalent of a sell rating. Funds rated overweight by AltaVista “consist of stocks trading at relatively expensive valuations and/or having below-average fundamentals,” according to the research firm. It appears the underweight rating on XLP is a valuation call.

The $6.9 billion XLP allocates over 29% of its combined weight to Dow components Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO) and Wal-Mart (NYSE: WMT).

Some investors have been stepping into staples names as others depart. In the first quarter, hedge funds reportedly liquidated almost $550 million in staples positions, but XLP pulled in over $1 billion in new assets in the second quarter, making it one of the best sector ETFs in terms of second-quarter flows. [Staples ETFs Become Market Leaders]

Showing Page 1 of 2