Where to Invest Now
Market Analysis
Where to Invest to Profit from Rising Food Prices
05.29.08

Food prices are rising and it seems there is no getting around it. Every time I go into a grocery store prices have risen another 5% or even 10%. The financial headlines streaming out of Wall Street are full of stories about rapidly rising grain prices. The situation is so bad that some major chain stores recently limited the amount of rice customers could buy because people were stockpiling it as prices rose! The cost of grain also pushes up prices for beef and pork as farmers pass the rising costs of animal feed onto consumers. For most consumers and investors, this type of inflation is bad news.

But my Blue Chip Growth subscribers know where to invest to profit from this trend. My fundamental and buying pressure indicators picked up on the potential for “agflation” before it hit the newswires. In fact, my Blue Chip Growth portfolio contains several companies that are benefiting from the rising global demand for food and grain.

Monsanto Corporation (MON), a leader in agricultural seeds, is always finding new ways for farmers to increase their productivity. With the demand for grain at an all time high, this innovative company is one-step ahead as it sets its sights on future agricultural needs.  MON’s revenue and earnings growth continues at record rates as farmers all over the globe scramble to grow more crops without investing further capital into buying additional acreage.

Syngenta AG (SYT) is in the same type of business, and also one of my Blue Chip Growth stocks.  This Swiss company produces seeds as well as herbicides and pesticides to help farmers expand crop harvests. Just like Monsanto, Syngenta’s sales and earnings are growing rapidly. It’s only a matter of time before growth is reflected in the stock’s price, given that the global demand for food won’t waver anytime soon.

Its not just food demand that’s driving the rise in grain prices. As the United States and other countries look for a way to escape climbing oil prices, the brewing of biofuels has strained the demand for grain products. In fact, it is estimated that about one third of harvested corn crops in the United States are devoted to the production of ethanol to help offset oil dependency. As farmers look to expand their acreage of corn, they’re providing a major boost to fertilizer companies. The equation is simple: The demand for more corn and grain production equals greater demand for fertilizer.

If you're looking for where to invest, Mosaic (MOS) and Potash (POT) are two additional leading fertilizer companies in my Blue Chip Growth portfolio that have benefited from this demand tremendously.  Both are experiencing record growth and rising margins as there is a backlog to produce the supply of fertilizer that is necessary to meet the demand for these companies’ products. They are two of my favorite stocks and a great way for you to benefit from rising food prices.

Another Blue Chip Growth company profiting from rising food prices may not immediately come to mind when you consider stocks benefiting from this global demand. An added bonus is that this company is also benefiting from the weak dollar and the emerging global middle class. What’s the name of this gem of a stock? Well, you’ve most certainly heard of it before, and even more likely recognize its golden arches regardless of what state or country you call home. That’s right, McDonalds (MCD). It’s the largest fast food company in the world, consistently offering food at low prices. As casual dining locations become too costly for the average consumer given the high food and gas prices, McDonalds has become an easy, quick and cost effective alternative for a meal out with the kids. We should also take into account the emergence of a global middle class that’s looking to eat out more and turning to McDonalds as a cost-effective solution. MCD also has pricing power as the dollar continues to weaken against most foreign currencies.

When today’s bad news headline has to do with rising food prices, the spiraling cost of oil or the weakening dollar, it can be difficult figuring out where to invest. But there are always companies poised to benefit from otherwise detrimental situations. Allow yourself to be one of the few investors out there watching their stocks prosper as the economy takes a nose dive. As a subscriber, you’ll be the first to know where to invest your money to profit from all the bad news. My powerful fundamental and quantitative indicators continue to identify companies that profit from what is happening in the economy right now. Try a risk free subscription to Blue Chip Growth today and start by investing in trends that are happening right now instead of the trends Wall Street wishes were happening!

Your Navellier Subscriptions

Subscribers log in below for complete portfolios, specific buy prices, up-to-the minute buy/sell/hold recommendations and more!

Not a subscriber? Sign up risk-free today.

Blue Chip Growth
Emerging Growth
Quantum Growth
Global Growth
Week of 06.09.09
Video Demo    
Stock Symbol Grade  
Bristow Group BRSCHOLD
Dresser-Rand GDRCBBUY
ENGlobal Corp.ENGDSELL
Geokinetics InGOKBBUY
North AmericanNOACHOLD
Oceaneering InOIIBBUY
Stock Symbol Grade  
AirTran HoldinAAIDSELL
Allegiant TravALGTDSELL
Copa Holdings CPABBUY
Delta Air LineDALDSELL
Hawaiian HoldiHACHOLD
JetBlue AirwayJBLUDSELL
powered by PortfolioGrader Pro