No More Unlimited Breadsticks

Thursday, 29 May 2008 | 6:37 PM ET

If you're playing CNBC's Million Dollar Portfolio Challenge, the following trades could be something to think about, suggests Dylan Ratigan.


As food prices surge companies that can aggressively hedge their costs should benefit. What’s worth watching?

Investors are betting that Darden Restaurants stock will remain a tasty treat despite high food costs. On Tuesday Merrill Lynch upgraded DRI to “Buy” largely due to their ability to hedge costs. Subsequently the stock surged nearly 4%.

What other companies could be similarly well positioned? Jon Najarian came up with the following….


The cereal maker hedges 70% of their exposure to grains.


The java gianthedges directly with farmers and has $320 million or its entire 2008 coffee hedged. They also hedge currency but were not specific, reveals Najarian.

How would you trade it?

I think the better trade is to short the poorly hedged restaurants, Najarian says. It seems to me that both Bob Evans and Buffalo Wild Wings fall into that category.


Tomorrow's Trades #2
With food inflation surging, restaurants are hedging costs, with the Fast Money crew.

If you're playing CNBC's Million Dollar Portfolio Challenge, the following trades could be something to think about, suggests Dylan Ratigan.

Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to fastmoney@cnbc.com.

Trader disclosure: On May 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (BTU), (C), (AGU), (NUE), (GS), (INTC), (MSFT); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (AAPL); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (BIG); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm And Finerman Own (GLNG); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY Pete Najarian Owns (AAPL), (ANR), (BHI), (TSO), (XTO), (XLF), (HPQ), (BKC) (MAS), (ENER), (SYMX) (SVNT); Pete Najarian Owns (BAC) Puts

Jon Najarian Owns (DRI), (SBUX)

  Price   Change %Change

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report

  • Jay Yarow, The Business Insider, and Steve Milunovich, UBS, discuss whether Tim Cook is to blame for Apple's drop in growth. I think it's pretty clear they missed the big phone market and overestimated the success of the plastic 5C phone, says Milunovich.

  • CNBC's Eamon Javers reports on Bill Ackman's stake in Allergan. Javers says this is a classic case of insider trading that is not against the rules.

  • FMHR trader Josh Brown thinks Dunkin' Brands looks fantastic technically, while Mike Murphy says investors are questioning the company's massive expansion plans.