In this article, we will take a look at the 10 best future food stocks to invest in today. You can skip our comprehensive analysis of these companies and go directly to the 5 Best Future Food Stocks to Invest in Today.
Food is an extremely lucrative industry where major companies and new entrants are relentlessly trying to outdo each other through taste, safety and transparency, innovation and product differentiation, as well as capitalizing on new trends like plant-based meat alternatives that are often touted as a solution to food security problems. According to the National Restaurants Association in the United States, there were close to $700 billion in food sales made by restaurants in 2020 despite the COVID-19 pandemic.
New Trends in the Food Industry and the COVID-19 Impact
In the convenience food sector, sales went up more than 70% due to supply chain chain disruptions to large food suppliers. For example, The Kraft Heinz Company (NASDAQ: KHC), a large cap multinational food company based in the US, reported a 7% increase in organic ketchup sales as restaurants loaded up on the condiment last year fearing a shortage. Kraft Heinz Company (NASDAQ: KHC) controls more than 70% of the $1 billion industry in the country. It raised prices by 13% and also ramped up supply of the item to meet demand.
Amazon.com, Inc. (NASDAQ: AMZN), the Washington-based retail company, is forecast to overtake food industry giant Walmart Inc. (NYSE: WMT) in terms of gross market value within the next few years. Amazon.com, Inc. (NASDAQ: AMZN) is a disruptor in the food industry, which entered the market with its purchase of Whole Foods. However, with competitive pricing and technological innovation, it has managed to close the gap on Walmart Inc. (NYSE: WMT) in retail and grocery sales in the United States.
Beyond Meat, Inc. (NASDAQ: BYND), a Los Angeles-based alternative meat provider, has also grown by leaps and bounds in the past few years. The company has signed lucrative deals with McDonald’s Corporation (NYSE: MCD) and Yum! Brands, Inc. (NYSE: YUM) in the past few months and seen share price skyrocket to all-time highs. It has also introduced a new type of plant-based meat that is cheaper and healthier than previous iterations. Beyond Meat, Inc. (NASDAQ: BYND)’s new product has 50 fewer calories and costs almost 40% less than the previous version.
Global management consultancy McKinsey claims that data driven innovation is going to drive the food industry forward in the next few years. These data trends would also result in a pivot towards personalized marketing of food products, the consultancy has forecast. It also says that big brands will face stiff competition from challenger firms, but bigger companies are likely to prevail as the post-pandemic economy will shift focus towards private label products. The pandemic-induced wellness preferences are also here to stay.
The technological innovation in the food industry is also affecting the stock market. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of 10 best future food stocks to invest in today.
Best Future Food Stocks to Invest in Today
10. Dover Corporation (NYSE: DOV)
Number of Hedge Fund Holders: 32
Dover Corporation (NYSE: DOV) is an Illinois-based industrial firm with significant stakes in the refrigerated food equipment business. The company makes and sells refrigeration systems, refrigeration display cases, commercial glass refrigerators and freezer doors, and brazed plate heat exchangers for industrial-scale heating and cooling. It also markets commercial food service equipment and can-related machines. The firm was founded in 1947 and is placed tenth on our list of 10 best future food stocks to invest in today.
Dover Corporation (NYSE: DOV) reported quarterly results on April 20, beating market estimates on revenue and raising full-year guidance. The firm posted earnings per share of $1.81, beating expectations by $0.35. The company raised guidance on revenue to 12%. The share price of the firm climbed more than 2% after the update.
At the end of the fourth quarter of 2020, 32 hedge funds in the database of Insider Monkey held stakes worth $738 million in the firm, down from 40 the preceding quarter worth $687 million.
9. BRF S.A. (NYSE: BRFS)
Number of Hedge Fund Holders: 11
BRF S.A. (NYSE: BRFS) is a Brazil-based food company that owns more than 30 brands. It is placed ninth on our list of 10 best future food stocks to invest in today. The firm concentrates on raising and slaughtering animals for meal production and other products. It sells frozen whole and cut chicken, frozen pork, beef, processed food products, and frozen processed meats like hamburgers, steaks, breaded meat products, kibbeh, and meatballs. It owns the Sadia, Perdigão, Qualy, Chester, and Kidelli brands, among others.
BRF S.A. (NYSE: BRFS) announced a ten-year expansion plan late last year and the share price of the firm has soared since it promised to explore new markets in Turkey and Saudi Arabia. The company outlined that it would spend more than $55 billion in a bid to raise revenues beyond $100 billion over the period.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in the firm with 2.5 million shares worth more than $10.7 million.
8. The Kroger Co. (NYSE: KR)
Number of Hedge Fund Holders: 36
The Kroger Co. (NYSE: KR) is an Ohio-based retail brand that was founded in 1883. It is placed eighth on our list of 10 best future food stocks to invest in today. The company is one of the largest retailers in the US in terms of revenue. The firm operates more than 2,700 stores in more than 30 US states. The firm is famous for a grocery-pharma store model that sells fresh food items as well as medicines. The firm has a market cap of more than $27 billion and reported more than $132 billion in revenue in 2020, up from $122 billion in 2019.
Investment advisory Argus on April 8 called The Kroger Co. (NYSE: KR) a winner of the post pandemic economy and maintained a Buy rating on the company with a price target of $42. The advisory said that the retailer was gaining market share from competitors with the help of competitive pricing, a trend it forecast would continue well into the year.
At the end of the fourth quarter of 2020, 36 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in the firm, up from 35 in the preceding quarter worth $2.4 billion.
7. Mondelez International, Inc. (NASDAQ: MDLZ)
Number of Hedge Fund Holders: 50
Mondelez International, Inc. (NASDAQ: MDLZ) is a Chicago-based multinational food company. It sells food, beverages, and snacks in more than 160 countries around the world. It was founded in 2000 and is placed seventh on our list of 10 best future food stocks to invest in today. The company is famous for selling snack items like biscuits, crackers, chocolates, as well as gums and candies. Some of the renowned brand names it owns are Cadbury, Milka, Toblerone, Oreo, LU, and Tang, among others.
Mondelez International, Inc. (NASDAQ: MDLZ) has a market cap of more than $82 billion and posted annual revenue of $26 billion in 2020, up from $25 billion in 2019. On April 28, the firm posted strong quarterly results and stock rallied by more than 5% to all time record-highs.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Trian Partners is a leading shareholder in the firm with 12.2 million shares worth more than $715 million.
6. Ingles Markets, Incorporated (NASDAQ: IMKTA)
Number of Hedge Fund Holders: 20
Ingles Markets, Incorporated (NASDAQ: IMKTA) is a North Carolina-based supermarket chain that operates close to 200 stores in the southern part of the United States. It was founded in 1963 and is placed sixth on our list of 10 best future food stocks to invest in today. Some of the food-related products that it sells at the markets include grocery, meat and dairy products, produce, frozen foods, and other perishables items. The firm also has stakes in the pharma and fuel station business, operating more than two hundred such units in the US.
Ingles Markets, Incorporated (NASDAQ: IMKTA) declared a quarterly dividend of $0.165 per share on March 29, in line with estimates. It also approved a $2 million share repurchase program earlier that month, which left close to 20 million shares outstanding in the firm.
At the end of the fourth quarter of 2020, 20 hedge funds in the database of Insider Monkey held stakes worth $91 million in the firm, up from 16 in the previous quarter worth $71 million.
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Disclosure: None. 10 Best Future Food Stocks to Invest in Today is originally published on Insider Monkey.