Even in a recession, "people gotta eat," writes Citigroup analyst David Driscoll. He scratches his head over the market's rough treatment...
Even in a recession, “people gotta eat,” writes Citigroup analyst David Driscoll.
He scratches his head over the market’s rough treatment of food makers (see table).
“We see no correlation between food sales and GDP growth,” he says in a recent note to clients.
His top pick is ConAgra (CAG), owner of well-known grocery brands such as Slim Jim, Snack Pack and Swiss Miss.
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Last year, ingredient costs and a peanut-butter recall nipped ConAgra’s profits.
Now, Driscoll thinks ConAgra is prepared to boost prices and cut costs.
That strategy will pay off when it reports its results for its fiscal second quarter ending in May, he says. That is, unless retailers respond by swapping out ConAgra brands for “private-label” — or store-brand — competition.