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Food Stocks: Time to Buy the Cream

Friday, 6 Feb 2009 | 2:08 PM ET

Is it time for investors to feast on food stocks? David Palmer thinks that's a reasonable assumption.

"They're a decent place to be," the UBS senior restaurant analyst told CNBC. "Input costs are coming off their highs; certainly, people have to eat, so, as people look for cheaper calories, (packaged food companies) should be doing OK."

Falling corn and dairy prices will help.

Recommendations:

"Certainly, companies like General Mills or Kellogg, by the second half of '09, should start to benefit from some of these input costs coming off," he said.

Also on his list are Dean Foods, Kraft Foods, Yum Brands and McDonald's.

Stocking Up on Packaged Food
Consumers are feeling the pinch and are buying more dairy and packaged foods, says David Palmer, UBS senior restaurant analyst

Disclosures:

Kraft Foods and General Mills are investment banking clients of Palmer's firm.

Disclaimer

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