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Fast Money

Spam Rally

We ask the boss at Spam maker Hormel, why the stay-at-home eating trade is working?

Hormel CEO Jeff Ettinger joins the panel for this conversation. Following is a summary of his main points.

Tomorrow's Trades #3

Why is your business prospering right now?

"Our growth has come through innovation, particularly in the area of convenience meals," replies Ettinger. "We have a line of products called 'Hormel Completes' that grew over 60% during the quarter."

Tell us more about that line.

“The 'Hormel Completes' line is a line of microwavable trays that don’t require refrigeration and they heat up in 30 seconds. And we have 21 varieties," says Ettinger. “We’re having a heck of time just keeping up with production. We just announced a new plant that will open in 2009 dedicated to this line.”

Where are we with Spam?

“We had a fine quarter with Spam, but 2/3 of our growth in the last quarter came from the microwave area of the business,” replies Ettinger. “And some of the other areas that we’ve had success with include the Hormel Party Tray line and our Natural Choice line of products.”

Are you feeling a pinch from soft commodity price increases?

“We’re seeing cost inflation on the grain side,” replies Ettinger, “but the growth we’re having in the innovative items allows us to shine through on the bottom line."

Traders, what do you think of this stock?

I think Hormel, as well as General Mill is in the right place a the right time, says Jeff Macke.

I also like Hormel says Guy Adami. But, stop out at $40.

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Trader disclosure: On Feb.19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC); Finerman Owns (GS); Finerman's Firm And Finerman Own (CROX), (KALU); Finerman's Firm Owns (MSFT), (TSO), (VLO), (WMT), (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM),(COF); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (INTC), (MER),(MSFT), (BLK), (GOOG), (AAPL); Seygem Asset Management Owns (CCJ), (TIE), (TSO), (EEM), (GFI) (HMY), (FMX), (FMCN); Seygem Assset Management Owns Shares Of Uranium One