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Five Food Investments to Buy as Hedges Against Inflation and War

Five food investments to buy as hedges against inflation and war should avoid the worst fallout from rising prices and Russia’s disruption of agricultural…

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Five food investments to buy as hedges against inflation and war should avoid the worst fallout from rising prices and Russia’s disruption of agricultural commodities, food and grain that its continuing invasion of Ukraine has caused other countries.

The strain on the world’s food supply has only worsened in the past week as Pakistan has been deluged with flooding that has put one-third of the country underwater, its top officials said. Another calamity is a drought that has dried out food production in much of Africa, as well as hurting many European nations such as Spain.

Almost half of the 27-nation European Union is facing drought conditions, with Belgium, France, Germany, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Romania also increasingly affected. In fact, an ancient Roman military camp in northwestern Spain has been revealed fully as reservoirs have shrunk in Europe amid a record-breaking drought.

Five Food Investments to Buy Include ETF Picked by Pension Head

Food, beverages and other consumer staples investments normally outperform stock indexes during recessions and bear markets, said Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter. Such companies tend to have reliable cash flows and can raise prices as costs climb, he added.

“Consumers will reduce spending in other areas when money becomes tight,” Carlson continued.

 Bob Carlson, leader of Retirement Watch, meets with Paul Dykewicz.

For a diversified position in food and beverage stocks, Carlson suggested an exchange-traded fund (ETF) such as Invesco Dynamic Food and Beverage (PBJ). The fund tends to have smaller and more growth-oriented companies than others in the consumer staples sector, he added.

The ETF has 29 stocks, and 47% of the fund is in the 10 largest positions. Top holdings recently were General Mills (NYSE: GIS), Keurig Dr. Pepper (NASDAQ: KDP), Sysco (NYSE: SYY), Hershey (NYSE: HSY) and PepsiCo (NASDAQ: PEP).

Hershey Recommended by Stock Picker Woods and BofA

The Hershey Company (NYSE: HSY), of Hershey, Pennsylvania, is the first recommended stock among the five food investments to buy. It has many favorable attributes, including a Buy recommendation from BofA Global Research, due partly to its resilience in times of economic distress when people crave sweets to eat as comfort food.

“I’m sweet on the company literally known for its ‘Kisses,’ and that is The Hershey Company,” said Jim Woods, who heads the Successful Investing and Intelligence Report newsletters, as well as directs High Velocity Options and Bullseye Stock Trader. He has recommended Hershey in the past in High Velocity Options and could do so again in that fast-paced trading service when the timing is right.

Paul Dykewicz meets with stock picker Jim Woods, who co-leads Fast Money Alert. 

Woods explained that as the leading U.S. confectionery manufacturer, Hershey controls around 46% of the domestic chocolate space with brands such as Hershey bars, Reese’s and KitKat.

“Last quarter, HSY saw strong earnings per share (EPS) growth of 22% year over year, and I expect the company to deliver an even tastier result when they report earnings again in late October,” Woods said. “The reason being is that confection sales are up of late, and I think it’s because many consumers are taking refuge in the small pleasures in life where they can, especially considering the dual pinch of rising inflation and soaring gas prices.”

Another sweet aspect of HSY is the stock’s technical pattern, which is showing a bullish breakout over the past week that has vaulted it back above resistance at the 50-day moving average, added Woods.

Chart courtesy of www.stockcharts.com

Archer Daniels Midland Becomes One of Five Food Investments to Buy 

Chicago-based Archer Daniels Midland (ADM) is one of the world’s largest processors of food and beverage ingredients. It also has a smaller business focused on nutrition for animals and people.

“The company is considered to have some of the strongest fundamentals for its industry,” said Michelle Connell, a former portfolio manager who heads Dallas-based Portia Capital Management. Those fundamentals feature one of the highest growth rates for return on assets, a five-year earnings per share (EPS) growth greater than the industry and a lower price/cash flow ratio than its competitors, she added.

Thus, an investor pays less for ADM’s cash flow than for the company’s competitors, Connell continued.

The company has been consistent in providing its investors with upside surprises for the last 12 quarters, Connell counseled. This is due to high demand for its products, sustained productivity improvement and product innovation, she added.

Chart courtesy of www.stockcharts.com

For example, the development of destination marketing for the company’s agricultural services business segment involves moving products from ports of entry to their ultimate destination, Connell said. This has enhanced profit margins for the segment, with ADM offering guidance that its volume growth will reach 30% for destination marketing by 2025, she added.

“Thus, this innovation will continue to be a future profit enhancer,” Connell counseled.

ADM, One of Five Food Investments to Buy, Offers Dividend Payout

Another plus is that ADM is a “solid dividend candidate” with a yield of 1.76%, Connell continued.

“ADM has been an exceptional investment… versus the underlying market or the S&P,” Connell said. “It should continue this trend in the foreseeable future.”

Michelle Connell leads Dallas-based Portia Capital Management.

Connell offered the following highlights for ADM.

  • For the past 10 years, an investor in ADM would have made 239%, before factoring in its dividend yield. For the same period, the S&P has only returned 187%.
  • For many years, ADM did not repurchase its stock. However, this past February, the company announced an 8 billion share repurchase program.
  • While the stock is up over 30% year to date, most analysts believe that there’s more upside from ADM’s current price.
  • The stock’s 12-month upside estimates range from 10-25%.

But ADM is not without risk, Connell said. Risks include foreign exchange exposure and a larger than anticipated impact on production from inflation.

J.M. Smucker Earns Berth Among Five Food Investments to Buy

J.M. Smucker (SJM), of Orrville, Ohio, is one of the largest U.S. food manufacturing and food service companies, with $8 billion in sales and $1.4 billion in operating profit in fiscal year 2022 across its four main sectors. Those sectors are U.S. retail consumer coffee, U.S. retail consumer foods, U.S. retail pet foods and international and food service.

BofA Global Research rates SJM shares as a Buy after several years of divestitures. The company now appears to be positioned well to take advantage of low price elasticities in its remaining portfolio compared to its center-store packaged food peers, according to BofA.

In addition, SJM has reduced its private label exposure, while optimizing margins and stimulating sales growth in core products through innovation and capacity expansion.

BofA’s $160 price objective on SJM, up recently from $155, is based on 17.5x of the investment firm’s 2023 EPS estimate. The valuation multiple is at a discount to overall peer group average of 19x, but more in line with centers store packaged food peers that is warranted as SJM executes against its fiscal year 2023 plan, BofA continued.

Chart courtesy of www.stockcharts.com

Potential outperformance could occur with faster-than-expected sales growth and greater share gains, specifically in “Uncrustables” and coffee, BoA wrote in a research note. Other pluses could come from lower-than-expected commodity cost inflation, a quicker-than-anticipated rebound after its Jif peanut butter recall and an improved balance sheet that allows for share buybacks or acquisitions.

Risks to BofA’s price objective include continued weakness in sales growth and profitability primarily within pet food as competition intensifies, slower pet food expansion plans, increased demand elasticity in roast and ground coffee and slower Jif recovery than expected.

PepsiCo Gains Slot Among Five Food Investments to Buy

BofA’s quality holding in consumer staples not only include Hershey but PepsiCo (NASDAQ: PEP), a Purchase, New York-based global snack and beverage company that manufactures and markets salty and convenient snacks, carbonated and non-carbonated beverages and foods. Key divisions include Frito-Lay North America (FLNA), Quaker Foods NA, North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA) and Asia, Middle East and North Africa (AMENA).

The company also operates in the United Kingdom, Mexico, India and China. Brands include Pepsi Cola, Mountain Dew, Gatorade, Tropicana, Frito-Lay, Quaker and among others. BofA has a Buy rating and a $190 price target on the stock.

“We continue to believe our multiple fairly reflects PEP’s balanced momentum, margin support and brand investments, capable of delivering the high end of their long-term outlook,” according to a recent BofA research report.

Upon taking the helm as PepsiCo’s CEO in 2018, Ramon Laguarta’s efforts to pivot the company towards a growth-oriented path have taken root, BofA wrote. Reinvestment in the business and an appetite for risk remain the cornerstone philosophies of this strategy, reflected in PEP’s ramping digitization efforts, new category expansion and supply chain investments to fuel a stronger innovation engine, BofA added.

Chart courtesy of www.stockcharts.com

U.S. COVID Deaths Near 1.045 Million

COVID-19 cases and deaths can affect supply and demand for products such food, particularly with global sourcing of ingredients. For that reason, trends warrant watching.

U.S. COVID-19 deaths rose for the fifth consecutive week by more than 3,000, jumping 1,044,730, as of Aug. 30, according to Johns Hopkins University. Cases in the United States climbed to 94,379,514. America holds the dreaded distinction as the nation with the largest number of COVID-19 deaths and cases.

Worldwide COVID-19 deaths in the last week increased by more than 33,000 to total 6,490,754, as of Aug. 30, according to Johns Hopkins. Global COVID-19 cases reached 602,256,881 on the same date.

Roughly 79.1% of the U.S. population, or 262,643,277, have received at least one dose of a COVID-19 vaccine, as of Aug. 24, the CDC reported. Fully vaccinated people total 223,914,723, or 67.4%, of the U.S. population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to 108.5 million people, up 300,000 in the past week.

The five food investments to buy offer investors protection from the worst of inflation in more than 40 years, drought and Russia’s unrelenting invasion of Ukraine. In the wake of 0.75% Fed rate hikes in June and July and possibly another increase of that size in September, based on the latest signals from central bank leaders, the five food investments to buy may be enticing to consider for the portfolios of savvy investors.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

The post Five Food Investments to Buy as Hedges Against Inflation and War appeared first on Stock Investor.

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Launch startup Astra’s rocket reaches space

Rocket launch startup Astra has joined an elite group of companies that can say their vehicle has actually made it to orbital space — earlier than expected. The company’s Rocket 3.2 test rocket (yes, it’s a rocket called “Rocket”) passed the…

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December 15, 2020

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Rocket launch startup Astra has joined an elite group of companies that can say their vehicle has actually made it to orbital space — earlier than expected. The company’s Rocket 3.2 test rocket (yes, it’s a rocket called “Rocket”) passed the Karman line, the separation point 100 km (62 miles) up that most consider the barrier between Earth’s atmosphere and space, during a launch today from Kodiak, Alaska.

This is the second in this series of orbital flight tests by Astra; it flew its Rocket 3.1 test vehicle in September, but while that flight was successful by the company’s own definition, since it lifted off and provided a lot of data, it didn’t reach space or orbit. Both the 3.1 and 3.2 rockets are part of a planned three-launch series that Astra said would be designed to reach orbital altitudes by the end of the trio of attempts.

Rocket startup Astra’s first orbital launch attempt ends early due to first-stage burn failure

Astra is a small satellite launch startup that builds its rockets in California’s East Bay, at a factory it established there which is designed to ultimately produce its launchers in volume. Their model uses smaller craft than existing options like either SpaceX or Rocket Lab, but aims to provide responsive, short turnaround launch services at a relatively low cost — a bus to space rather than a hired limousine. They compete more directly with something like Virgin Orbit, which has yet to reach space with its launch craft.

The view from Astra’s Rocket 3.2 second stage from space.

This marks a tremendous win and milestone for Astra’s rocket program, made even more impressive by the relatively short turnaround between their rocket loss error in September, which the company determined was a result of a problem in its onboard guidance system. Correcting the mistake and getting back to an active, and successful launch, within three months, is a tremendous technical achievement, even in the best of times, and the company faced additional challenges because of COVID-19.

Astra was not expecting to make it as far as it did today — the startup has defined seven stages of reaching orbital flight for its development program; today it expected to achieve 1) count and liftoff; and 2) reaching Max Q, the point of maximum dynamic pressure undergone by a rocket in flight in Earth’s atmosphere. Third, they were looking to achieve nominal main-engine cutoff for first stage — and this is where they would’ve pegged success today, but the “rocket continued to perform,” according to CEO and founder Chris Kemp on a call following the launch.

Rocket 3.2 then performed a successful stage separation, and then the second stage passed through the Karman line, reaching outer space. After that, it went farther still, achieving a successful upper-stage ignition, and a nominal upper-stage engine shut off six minutes later. Even then, the rocket reached 390 km, which is its target orbital height, but then reached a velocity of 7.2 km per hours, just one half km/hour less than the 7.68 km required for orbital velocity.

Why Astra built a space startup and rocket factory in Silicon Valley

Astra emphasized that the mix for the propellant for this stage is basically only to be nailed down while testing in situ in space, so they say this will just require some upper-stage propellant mixtures to achieve that extra velocity, and Kemp said they’re confident they can do that in the next couple of months, and start reliving payloads early next year. This won’t require any hardware or software changes, the company noted, just a tweak in the variables involved.

Image Credits: John Kraus for Astra (opens in a new window)

He added that this is a big win for the underlying theory behind Astra’s approach, which focuses on using significant amounts of automation in order to reduce costs.

“We’ve only been in business for about four years, and this team only has about 100 people today,” Kemp said. “This team was able to overcome tremendous challenges on the way to this success. We had a member of the team quarantining, and tested positive on the way to Kodiak, which meant they had to quarantine the entire team, and then sent an entire backup team to replace them.” This was possible because they only use five people on the launch team.

“We now are at a point where just five people can go up, and set up the entire launch site and rocket, and launch in just a couple of days,” Kemp said. The team is literally just five people — including labor, rocket unloading, setup and everything on-site — the rest is run remotely from mission control in California via the cloud.

Now they will do some tuning for Rocket 3.3, which is currently in California at the Astra factory, before soon attempting that final orbital test flight with a payload on board to deploy. After that, they intend to continue to iterate with each version of Rocket launched, focusing on reducing costs and improving performance through rapid evolution of the design and technology.

Virgin Orbit’s first orbital test flight cut short after rocket released from carrier aircraft

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Contrarian Take: Covid Vaccine & the End of Anti-Vaxxers

    The modern Anti-Vaxxer movement of recent years traces its origins to a paper published in The Lancet in 1998 by (then Dr.) Andrew Wakefield linking 12 children who developed autism soon after vaccine administration. We later learn that Wakefield…

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December 4, 2020

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The modern Anti-Vaxxer movement of recent years traces its origins to a paper published in The Lancet in 1998 by (then Dr.) Andrew Wakefield linking 12 children who developed autism soon after vaccine administration. We later learn that Wakefield was funded by litigants against vaccine manufacturers, a detail he failed to disclose.

The paper was formally retracted by 10 of Wakefield‘s 12 coauthors; Worse still, in 2009 we learned in The Sunday Times that Wakefield had manipulated patient data and misreported results, falsely creating an appearance of a link with autism. In 2010 The Lancet’s editors fully retracted the paper. Wakefield was barred from practicing medicine in the UK.

~~~

In 2020, surveys by the Pew Research Center suggest that only than 60% of Americans say they will get a COVID-19 vaccine.

I have different take: I expect that number to be even higher, greater than 90%; further, I expect the Covid vaccines will be the beginning of the end of Anti-Vaxxer movement. War game a few scenarios out, considering social, legal liability and health care issues, and you see why this contrarian take is a very possible.

Begin with the development of this vaccine, and how different it was then normal. A huge financial incentive always surrounds the pharmaceutical and biotech companies working on developing cures, treatments, and vaccines for a variety of diseases. This incentive is why so much secrecy surrounds research, the strategies used, the specific methodologies under development, even diseases under of investigation. With billions of dollars at stake, companies have every incentive to keep their developments secret, saying as little as possible in public and therefor your competitors.

The speed, dollars and demand thrown at this changed that dynamic. Partnerships were struck between companies, and so secrecy was compromised. Government dollars meant full disclosures, data releases, and regular updates were demanded. This is very different than what passes for normal in the sector. It may not be perfect but is vastly more transparent than what occurs in other vaccine development trials.

Next, consider some social institutions that will be weighing in on this: Its clear from the early discussions of re-opening schools that the Teachers Unions were not happy with various state, town and city plans. Without liability protections for schools and administrators, they will manage to the most conservative risk posture. Imagine this litigation choice: Being sued by a family of someone whose Covid19 death is traced to the school, or being sued by someone who demands on sending their kid to school unvaccinated. It is a no-brainer as which case you would rather defend against.

So Public schools will likely insist that if you want to enroll your child, they must be vaccinated. Once that occurs, Private schools and non-union districts are likely to follow suit.

Next, consider large businesses: Airlines are exploring health passports, while some have already said proof of Covid vaccine will be required to book flights. Ticketmaster is requiring similar proof to attend live events.

Same with offices: barring any state laws offering exemptions, why would landlords want the liability? I can forsee new leases including a mandatory Covid vaccination clause. My partners and I manage a firm with about ~35 employees; do we want to take a risk that one of our employees gives another Covid? Making vaccinations mandatory is going to be policy at a lot of firms regardless of size.

But here is the next level: Once the world sees that the vaccines were safe and effective and are helping life return to normal, it will be increasingly difficult for the Anti-Vaxxers to keep making their claims.

Call it a pandemic bonus: The flat-earthers who keep pushing a discredited theory will get pushed further and further out to the fringe.

 

 

The post Contrarian Take: Covid Vaccine & the End of Anti-Vaxxers appeared first on The Big Picture.

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Common cold antibodies hold clues to Covid-19 behavior; lung scans speed Covid-19 diagnosis in stroke patients

Common cold antibodies hold clues to Covid-19 behavior; lung scans speed Covid-19 diagnosis in stroke patients

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Common cold antibodies hold clues to COVID-19 behavior; lung scans speed COVID-19 diagnosis in stroke patients

(Reuters) – The following is a roundup of some of the latest scientific studies on the novel coronavirus and efforts to find treatments and vaccines for COVID-19, the illness caused by the virus.

Common cold antibodies yield clues to COVID-19 behavior

Among people who were never infected with the new coronavirus, a few adults – and many children – may have antibodies that can neutralize the virus, researchers reported on Friday in Science. Among 302 such adults, 16 (5.3%) had antibodies, likely generated during infections with “common cold” coronaviruses, that reacted to a specific region of the spike protein on the new virus called the S2 subunit. Among 48 children and adolescents, 21 (43.8%) had these antibodies. In test tube experiments, blood serum from both older and younger uninfected individuals with cross-reactive antibodies could neutralize the new coronavirus. That was not the case with serum from study participants who lacked these antibodies. “Together, these findings may help explain higher COVID-19 susceptibility in older people and provide insight into whether pre-established immunity to seasonal coronaviruses offers protection against SARS-CoV-2,” the publishers of the journal said in a statement. The findings also suggest that targeting the S2 subunit on the coronavirus spike protein might be the basis for a drug or vaccine that works on multiple types of coronavirus. (bit.ly/3evCSFB)

Lung CT speeds COVID-19 diagnosis in stroke patients

In emergency-room patients with stroke, lung imaging studies can help detect COVID-19 before results of nasal and throat swab tests come back, researchers say. Stroke can be a sign of COVID-19, but swab results can take days to become available. At three New York City hospitals in March and April, doctors ordered computed tomography angiograms (CTA) on 57 stroke patients within 24 hours of hospital admission, to look for COVID-19-related pneumonia. Thirty patients turned out to have COVID-19, based on their nasal swab results. But the CTA scans, in combination with patients’ symptoms like cough and shortness of breath, allowed for the diagnosis of COVID-19 with 83% accuracy before the swab test results were received. Screening stroke patients for possible COVID-19 based only on symptoms is unreliable, because they may not have symptoms or they might not be able to speak, the researchers point out in their report in the American Heart Association journal Stroke. “Early diagnosis via CT scans has helped our center protect other patients and staff through early isolation, and it has also allowed us to start early supportive care for those suspected of having stroke who are COVID-19 positive,” coauthor Dr. Charles Esenwa of the Montefiore Medical Center said in a news release. (bit.ly/3pbSCCH)

New coronavirus sneaks out of cells “with the trash”

FILE PHOTO: A computer image created by Nexu Science Communication together with Trinity College in Dublin, shows a model structurally representative of a betacoronavirus which is the type of virus linked to COVID-19, better known as the coronavirus linked to the Wuhan outbreak, shared with Reuters on February 18, 2020. NEXU Science Communication/via REUTERS

The new coronavirus uses a surprising pathway to exit infected cells and go on to infect others, researchers have discovered. It hijacks a cell structure called the lysosome, which is normally where cellular trash goes to be destroyed. But the virus uses lysosomes as escape hatches, the researchers report in Cell. “To my knowledge coronavirus is one of 2 or 3 viruses to do this, and certainly the only enveloped virus,” said coauthor Nihal Altan-Bonnet of the National Heart Lung and Blood Institute, referring to viruses that have a membrane surrounding their genetic material. “All other enveloped viruses … use other pathways for cell-to-cell spread,” Altan-Bonnet added. These include influenza, hepatitis C, Dengue, Zika, West Nile and Ebola. When lysosomes degrade bacteria and viruses into little pieces, she explained, “these little pieces get presented on the surface of the cell to alert the immune system” to the invaders’ presence. By using the trash disposal system of the cell to get out, the new coronavirus disables the lysosome and disrupts alerting the immune system, she said. “We believe our discovery of the pathway used by coronaviruses to get out of cells will be fundamental to our understanding of how these viruses wreak havoc on our body, in particular our immune system.” (bit.ly/36aBSmr)

Open tmsnrt.rs/3a5EyDh in an external browser for a Reuters graphic on vaccines and treatments in development.

 

Reporting by Nancy Lapid; Editing by Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/article/us-health-coronavirus-science/common-cold-antibodies-hold-clues-to-covid-19-behavior-lung-scans-speed-covid-19-diagnosis-in-stroke-patients-idUSKBN27M2M6

 

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