Dollar General Corp. (NYSE:DG) has been the general store for the downwardly mobile. Where else can you pick up dog food, motor oil, and Klondike bars in one place, for rock bottom prices? Since 2009, Dollar General’s stock price has more than doubled, going from $22 per share to $57.71. You won’t see just Fords and Chevys in the parking lot, lots of Lexus SUVs and Avalons are parked, leaking fluids, while the newly downwardly mobile count change at the checkout line. One reason the downwardly mobile are shopping in Dollar General Corp. (NYSE:DG) is food.
Food prices have gone through the roof. Most don’t really notice this because most people in America don’t cook. Do they even teach Home Economics anymore? Smaller container sizes and bigger dimples mean big profits. Bunge Ltd (NYSE:BG) and Campbell Soup Company (NYSE:CPB) have been big beneficiaries of the new normal. As more people come to grips with the cost of eating, these two companies will continue to take advantage of this sad situation. Global agribusiness is big enough to take advantage of the Mild Depression. Bunge Ltd (NYSE:BG), as a holding company, has the technical skill, logistics, and legal protection to not only benefit from a lost decade, but to thrive. Campbell Soup is one of the few that can honestly say, “Been there, done that.” It survived the Great Depression, so it’s well poised to simply shake off the Mild Depression, and profit. A large can of Campbell Soup Company (NYSE:CPB)’s Vegetable soup in 1930 sold for $0.30. In 2009, that can of soup would set you back $1.19. Today, that can of soup costs $3.59. Forget meth, Walter White needs to cook vegetable soup for his family.
You don’t have to be in agribusiness or a stodgy “soup” company to take advantage of this mini depression. Amazon.com, Inc. (NASDAQ:AMZN) has thrived and will continue to play both sides of the economic coin. Those who have, buy, and buy, and buy. And, they buy using Amazon.com. Those who can’t pay the light bill, sell, and sell, and sell. They sell what little they have left on eBay. Buy or sell, Amazon.com, Inc. (NASDAQ:AMZN) profits. Sadly, the older downwardly mobile have been trying to save, while trying to stay alive. Express Scripts Holding Company (NASDAQ:ESRX) has been the go-to service for those wanting to save money on their prescriptions. Express Scripts is so popular that CVS Caremark Corporation (NYSE:CVS) and Walgreen Company (NYSE:WAG) have closed many urban stores because customers have absconded and use Express Scripts Holding Company (NASDAQ:ESRX) exclusively. These are examples of how everything has changed — the evidence is everywhere.
If you can’t beat em’…
You can, should, and must capitalize in this environment. Many have, and so can you. You can make money in this economic climate by embracing it or becoming a downwardly mobile casualty. Use the zeitgeist as your lever to gain a financial advantage. Invest in firms poised or positioned for revenue growth in this downwardly mobile environment. The Mild Depression is the 800 pound gorilla that should not be ignored or feared, it should be leveraged.
The article The Mild Depression: Downwardly Mobile Profits originally appeared on Fool.com and is written by John Moore.
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