Two Ways: Campbell's Says, "No Soup Discounts For You!"
Strengthen your portfolio in good times and bad.
The US consumer, battered by high energy prices in 2008 and a bleak employment picture throughout 2009, isn't likely to see relief from rising food prices. At least not from Campbell Soup (CPB). According to Reuters, there simply isn't a need to do so.
Campbell CEO Douglas Conant said, "Sales are growing, our marketplace presence is growing, consumer purchases are actually growing faster than sales… Clearly we're having a good year, we've had the best year in soup that I've experienced in my 9 years here… So we're not going to be reducing prices in the near term."
The only way the company would consider cutting prices is if commodities fell while margins improved. Campbell hedged some of its costs last year for grains and other ingredients when prices were near all-time highs. Those hedges expire in July. "If our margins start to turn around," Conant said, "then we'll reconsider that, but that's premature to talk about."
For more, see Satyajit Das' No Food For Oil: The Commodity Outlook.
From the Bull Pen: Professor Ryan Krueger and Professor Kevin Depew have talked about the earnings abilities from consumer staples companies for quite some time now.
Those bullish Campbell can set a sell stop below recent lows (near $25.50).
From the Bear Cave: Bears looking for a downside play can keep an eye on Harley Davidson (HOG). Entry can be near the 50 DMA ($11.40), but also recognize major resistance near $15.
Have a great night, Minyans! See you for Turnaround Tuesday!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter