Consumer Staples - TSN!!!
Tyson -TSN - $58 is one of my favorite ideas. When I can can buy a “near monopoly” at $1.1x book and .55x EV/Sales, I am all in. There is a complete lack of near-term earnings “visibility”, and that makes me very happy. The cattle cycle will turn eventually.
The question is with the market near all-time high, should I own another name in Consumer Staples for defensive purposes. I just listened to the CFO of Sysco present at a conference, and he told a compelling story. SYY has made solid share gains in its institutional business, but small restaurants have not bounced back. SYY is very well run, and it is a story I know very well. In chess there is a concept called a “waiting move”. I really love my new “shiny toy” in the portfolio Thor Indsutries - THO - $97, but maybe I should wait with SYY until the economic signals are more clear.
That is why you own stocks from this sector. They are defensive. SYY, COTY, CAG, and MGPI, are all ideas that deserve consideration
Sysco - SYY - $77 - small restaurants are the problem and the opportunity
MGP Ingredients - MGPI - $40 - not enough drinking going on??
Coty - COTY - $ 7 - China issues??, but very cheap
ConAgra - CAG - $27 - 5% yield, big market share in frozen dinners
Estee Lauder - EL -$74 - China, China, China
Lamb Weston - LW - $62 - folks are skipping the fries??
Flowers Foods - FLO - $20 - well run and cheap
SunOpta - STKL - $8 - has bounced
TreeHouse Foods - THS - $34 - great concept, poor execution
Danone - DANOY - decent dairy business, hard to trust the French
National Beverage - FIZZ - $45 - solid business, nothing exciting
Kimberly Clark - KMB - $131 - slow motion restructuring
Keurig Dr Pepper - KDP - $32 - coffee a tough call
Dollar General - DG - $76 - disturbing stories about pricing, pass
Diageo - DEO - not enough drinking, too many gummies?
McCormick - MKC - love the sauce story