Hi Wayne,
I have been watching the food stocks for some time now. The stocks I track are ARCHER-DANIELS (NYSE:ADM), INTL MULTIFOODS (NYSE:IMC), INTR BAKERIES CP (NYSE:IBC), FLOWERS INDS INC (NYSE:FLO), MIDWEST GRAIN (NasdaqNM:MWGP), CORN PROD INTL (NYSE:CPO), and DEERE & CO (NYSE:DE).
I need to add some more of the pure grain plays to this list since it looks like the grain prices are starting to look like they have bottomed. I expect the basic food companies to have pricing power with inflation that is driven by energy costs. There are a couple of other factors that need to be considered and that is weather and farmers with high leverage. The producers in this country are up to their ears in debt and some of them will not be able to plant next year. Also, the Canadians and Brazilians who have been dumping grain on the market in the last few yeas have to deal with energy inflation.
I have been buying those companies that get trashed and deliver good yields, using MB's philosophy that I can handle getting a good return while waiting for the capital appreciation. <ggg>
I don't know about Sara Lee during tough times or during periods of inflation. I remember during the days of high inflation these companies had difficult times because of price, people were buying foods that required preparation in the home. i.e., foods that were closer to the commodity. It could be different this time.
I am interested in thoughts from the rest of this community on this area of investing.
Joan |
