3 Food Stocks Bargain Hunters Should Buy Right Now
Due to market instability, bargain hunters are looking for safe havens with high potential returns. Because of the elevated situation, food companies with efficient pricing and saving techniques would likely do well in 2023.
As we near the end of 2022, we have highlighted a few food stocks that appear to be well-positioned for the new year, thanks to positive demand and good pricing tactics.
Increased at-home consumption habits developed since the pandemic have benefited some food stock companies’ retail operations. Their food service operations have also seen increased sales as customers return to normal routines.
Companies have capitalized on increased demand.
Companies have capitalized on increased demand through consistent brand-building activities, such as consumer-centric innovation and acquisitions.
Companies have been investing heavily in healthy offerings, owing to consumers’ growing interest in health and wellness (all the more since the pandemic).
Furthermore, businesses have gone all out to combat inflationary challenges. Food stock manufacturers have been dealing with rising ingredients, packaging, and transportation costs.
Players have raised product pricing and implemented
The increasing cost of labor owing to scarcity has also been a disadvantage. Players have raised product pricing and implemented more stringent cost-cutting and restructuring initiatives to address these problems.
Using the Zacks Stock Screener, we selected three well-ranked food stocks with a market cap of at least $1 billion. These food stocks also have a Value Score of A, which makes them even more appealing.
These food stocks will likely add flavor to investors’ new year palettes due to their strong fundamentals and robust potential.
3 Delicacies for 2023
Conagra Brands, Inc. CAG is a viable option. With a market capitalization of $18.5 billion, the company has benefited from its effective pricing and continued implementation of the Conagra Way plan.
Conagra has benefited from strength in the frozen and snacks categories and a resurgence in the food stocks market. CAG announced another price rise to combat inflation, which will take effect in the second quarter of fiscal 2023.
In fiscal 2023, we think efficient pricing and innovation will increase sales. Organic net sales are expected to increase by 4-5% annually in fiscal 2023. The adjusted EPS growth rate is expected to be between 1% and 5%.
The Zacks Consensus Estimate for Conagra’s fiscal 2023 earnings per share has risen a penny to $2.48 in the last 30 days, implying a 3.8% increase from the previous year’s reported figure.
The shares of this Zacks Rank #2 (Buy) business have risen 12.9% in the last six months. The company’s long-term earnings per share growth rate are 7.2%. The complete list of today’s Zacks #1 Rank food stocks can be found here.
Archer Daniels Midland Company ADM’s stock has increased.
Archer Daniels Midland Company ADM’s stock has increased 20.6% in the last six months. On its third-quarter 2022 earnings call, management noted that ADM is well-positioned to end 2022 on a high note, with momentum extending into 2023.
The company’s third-quarter profits were boosted by strong worldwide demand, gains from the integrated global value chain, a strong product range, and ADM’s team’s skill in dealing with volatile market situations.
Archer Daniels has made significant progress on its three strategic pillars: optimize, drive, and grow. The Zacks Rank #2 company has benefited from its Nutrition segment’s strong performance.
Over the last 60 days, the Zacks Consensus Estimate for ADM’s 2023 earnings per share has risen from $6.19 to $6.34. With a market capitalization of $51.4 billion, the company has a long-term EPS growth rate of 7.2%.
Ingredion Incorporated INGR is another option for investors. When it reported strong third-quarter 2022 results, the company raised its 2022 guidance.
The company has a market capitalization of $6.4 billion and has benefited from strong demand for core and specialty ingredients. Active price management across all regions has assisted INGR in dealing with rising input costs.
This Zacks Rank #2 stock has gained 11.3% in the last six months. The Zacks Consensus Estimate for Ingredion Incorporated’s 2023 earnings per share has risen from $7.56 to $7.82 in the last 30 days, representing a 10.8% increase from the previous year’s reported figure of food stock.
Single Best Pick to Double, according to Zacks.
Five Zacks analysts have chosen their favorite from among thousands of food stocks to rise by 100% or more in the next months. Sheraz Mian, Director of Research, selects one of those five to have the most explosive upside.
It’s a little-known chemical company that’s up 65% year over year while remaining dirt cheap. With relentless demand, increasing earnings projections for 2022, and $1.5 billion available for repurchasing shares, ordinary investors could get in at any time.
This firm could compete with or outperform other recent Zacks’ food Stocks Set to Double, such as Boston Beer Company, which increased +143.0% in less than 9 months, and NVIDIA, which increased +175.9% in a year.
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