Cadbury
(CBY)
might be the call today. This candy maker's forecast about rising gross margins flies in the face of everyone from Hershey
(HSY)
to ConAgra
(CAG)
, from Heinz
(HNZ)
to General Mills
(GIS)
.
Most people have been scared to death of owning packaged goods since the last quarterly reports, as every company struggled to raise prices to meet inputs. I still feel the pain of Tyson Foods'
(TSN)
Richard Bond when he talked about the travesty of ethanol, where 30% of the corn crop goes to make 3% of the gasoline.
Take a look at how the group has acted since then, with a focus on Pepsi
(PEP)
and Coke
(KO)
, two stocks that are selling below their historic multiples because of raw cost inputs that I believe are largely under their control. It is true -- as we know from Owens Illinois
(OI)
, the largest glass maker -- that some things are not going down in price. But to hear any player in the group, especially new player Cadbury, say encouraging things could bring people back to kick the tires, if not buy.
Oh, and it isn't the stable-dollar "worries" hurting the group, as Pepsi has gone down as much as KO with much less overseas exposure, although it does have higher raw costs problems because of Frito Lay.
And, in light of the positive initiatives of Clorox
(CLX)
, yesterday -- dividend boost, buyback -- there's lots of ways to think you could make money here.
Stocks like Pepsi and Coke and Proctor
(PG)
are famously (or infamously) option-pinned, so be careful about being aggressive. But this Cadbury makes me want to look again.
Please don't forget Heinz, which is the player most "like" Wrigley
(WWY)
in terms of brand name and size, although it sold at a much lower multiple to Wrigley on the takeout.
Random musings: Pickens talking wind. Wind is for real. Remember how I told you that Buffett had to beg GE
(GE)
for turbines? Maybe they were all going to BOONE!
At the time of publication, Cramer was long Owens Illinois.Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC.
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