This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

6 Star Picks in Food Stocks

Stocks in this article: ADM MOS GIS EAT DOLE SOUP

NEW YORK ( Market Bulls) -- In the U.S., last year's drought conditions reached their worst levels in more than 50 years, with more than one-third of the country categorized as "severe" or worse by the National Drought Mitigation Center.

These conditions led to sharp increases in global crop prices. Soybeans rallied 40% in early in the year and wheat prices rose by nearly 50% during the same period. In the fall of 2012, prices eased after crops were harvested. But many of the most commonly used commodities in this space remain at elevated levels.

The United Nations Food and Agriculture Organization expects global wheat supplies to fall to 661 million tons this year, which is below average global consumption levels for wheat (roughly 685 million tons). The U.S. Department of Agriculture forecasts food prices as a whole will rise by 3.5% to 4% in 2013. Wheat prices globally have risen to their highest levels in four years and are vulnerable to further increases if adverse weather conditions return.

Thus, the underlying bullish scenario continues and there are still opportunities for investors looking to capitalize on companies that are in a position to cash in on these market changes. Here, we will look at some of the best examples.

Archer Daniels Midland (ADM - Get Report) sells agricultural products to an international consumer base, and offers a dividend yield of 2.4%. With a P/E under 16, the stock has seen a 22.8% rally year to date but is still well below its 2008 highs, creating the potential for further gains as most of its production assets continue to meet demand.



Mosaic Co. (MOS) produces phosphate and potash crop nutrients. With its P/E of 13.6, the stock has experienced much more subdued gains this year (3.3%). Wall Street price targets are seen just below $85 (which is a massive 46% above current levels), creating excellent opportunity for a investors with a one-year time horizon.

Traditional favorite General Mills (GIS - Get Report) is another option for those focused on dividends. General Mills has increased its dividend by 65% in the last five years, shows institutional ownership of 70%, and offers a forward yield of 3.2%. The stock has seen a substantial run so far this year but can still be viewed as a viable option for those with multi-year investment horizons.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs