Your Trades Are What You Eat – Food Stocks
Among the many market segments and trade vehicle available to day traders few have provided the appeal offered by food stocks in recent months. Such giants in the industry as McDonald’s and Pepsico have been rewarding investors with rising stock prices and earnings meeting or in fact exceeding analysts’ expectations. There is an old saying that “you are what you eat”. This may very well be adapted to your trade strategy in that your investments may also fit into the foods or food sources that you prefer. Investors that feel trading in food markets is right for them have a number of options to focus on:
- Food products and commodities such as wheat, fruits and vegetables, or meat and poultry
- Beverage companies
- Restaurant stocks
- Food packaging and processing companies
- Grocery store stocks
Within each of those markets are many companies to consider for your trade capital. Many of these companies are largely recession proof due to the simple fact that however tight the economy becomes people still have to eat. Of course in the best of times cash flow is improved allowing consumers to enjoy higher-end services such as restaurants that offer luxury services and expensive meals, which may impact your choice of investments.
What Impacts Food Stocks?
When considering the specific market segments or companies it’s fairly simple to detect activity that can influence stock prices:
Mergers and acquisitions – volatility in restaurant chains make changes in restaurant ownership brands a relatively common occurrence in the food industry. Such activity can stimulate rising stock prices for the acquiring company and may also generate a positive influence on the business being acquired due to the terms of the take-over offer. An example: food distribution giant Sysco is enjoying all-time highs in their stock performance after announcing their intention to acquire European food distributor the Brakes Group which extends their global reach significantly.
Down-sizing – as restaurant operations resize or restructure the number of locations and management organization potential investors may view this as a struggle to stay alive in their market with an accompanying downward slide in stock price.
Recalls – well-publicized recalls or food safety concerns can generate almost immediate drops in share prices even for reputable companies. Some smaller firms have been shuttered temporarily or even forced out of business entirely as a result of fines and neglect in following food safety requirements.
Growth plans – fast food companies expanding into new geographic markets or products encourages investors and existing shareholders who tend to see this as an indication of future rising profits and visionary management teams. Example: Restaurant Brands International has experienced growth in both their Tim Horton’s and Burger King brands through their combined expansion efforts over the past year.
Turn-arounds – companies that have been in a state of brand positioning to gain or regain market share make investors optimistic of future performance. Example: ConAgra values experienced an all-time high this past week. Part of the reason is positive results from a new focus on reviving quality and consumer interest in their Banquet and Bertolli brands.
Trading Food Stocks with SureTrader
As with many stock trades one of the most important tools for getting in and out at the right time for day traders is continuing awareness of news that could impact your trade values. Notices of product recalls or M&A activity can provide just the advantage you need to make the right choices in buy and sell timing.
Use SureTrader’s online real-time information to enable you to monitor trends and news of food companies and restaurant markets to execute trades quickly and accurately to maximize your gains. Online broker SureTrader is there with friendly and courteous support unmatched by other brokers and is available to every client 24×7 to answer questions and to resolve your problems.
Using your laptop, desktop, or mobile devices you can access real-time trade information using both iOS and Android platforms. SureTrader is there for you anywhere, anytime for quick and easy trade execution even in post-market trading.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.