NEW YORK (TheStreet) -- In today's investment ideas, Wall Street analysts have some tips for investing in Europe and U.S. auto stocks. They also tell you how to position yourself for the rise in global food demand as well as outerwear trends during a warm winter:
1) Get Picky on Food
Demand for food in emerging markets will rise. How does one take advantage of this? Take a look at opportunities in grain processors.
David Driscoll, analyst with Citigroup, writes in a recent note: "The grain processors reside in a secular growth agricultural sector, which is currently earning below its cost of capital. As a result very few new projects are being announced, although this must ultimately happen if the emerging markets want more food. This means eventual pricing power and better margins are on the horizon for the sector over the next several years."
Citigroup says it has already seen signs of improvement in the margins of oilseed crushing. Bunge Limited (BG) and Corn Products International (CPO) are the firm's top large and small cap food picks. "Valuations across the group are trading 25% to 50% below 10-year historic average valuation levels, signaling a very pessimistic view placed on the grain processors by the market," writes the firm. Among trends that may boost the stock of food processors, prices for corn sweeteners are expected to increase in 2012. Citigroup estimates that the corn sweetener and starches industry in North America was able to drive up prices by 13% to 15% in 2012. For signs of whether demand for corn sweeteners will continue to be strong in 2012, take a look at upcoming earnings from Corn Products International and Archer Daniels Midland (ADM).Select the service that is right for you!
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