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Yes, says Alexia Howard, senior research analyst at Sanford Bernstein.
She told CNBC why she remains “bullish on the food group.”
Outlook
Howard acknowledged the rising costs in grain products – “bread, cereal, cookies, crackers” – but said that certain factors like increased pricing “can offset that.”
“Thanks to productivity improvements, though margins are under pressure, the EBIT growth – operating profit growth – is now actually coming through quite well,” she said.
And rising fuel prices are making Big Food stocks good defensive plays, as consumers shy away from restaurants.
Recommendations
“General Mills [GIS
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] did quite well in the third quarter, Heinz [HNZ
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] has also done quite well recently,” Howard said, expecting these successes to continue.
The analyst named Sara Lee [SLE
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] and especially Kraft Foods [KFT
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] as plays on “an interesting story in dairy.”
Disclosures
Howard’s firm holds a significant amount of shares in General Mills and Sara Lee; Kraft is or was a client of Sanford Bernstein during the last 12 months.
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