Ralcorp's Cheap and a Winner

Ralcorp's stock remains undervalued based on peer valuation, despite gaining 9.9% so far this year, compared with a decline of 3.1% for the S&P 500 Packaged Foods Index. Its price-to-earnings ratio stands at 13.06 as of Oct. 6, lower than the food products average of 19.44. The stock is also trading at a discount based on price to book, price to sales and price to cash flow.

Keep in mind that many of the stocks in Ralcorp's peer group have higher name recognition and branding power, which may explain why their stocks trade at a premium. But given current economic conditions, Ralcorp is in a position to outperform competitors.