Getting Organized - Consumer Staples

I started 40 years ago analyzing consumer staples stocks for a bank in Dallas. The big cap stocks here can be a little boring, but there are plenty on interesting mid-cap companies.

My favorite large cap is Tyson - TSN. When the cattle cycle turns they can make $10/share or more. Put a 10x multiple on that an make a conservative target price $100. Treehouse Foods - THS is my second choice. I love the generics business, and their restructuring finally seems to be working. Earnings can get back to $4/share, with a market multiple of 15x my rough target is $60.

Given my dire economic/election forecast, I guess could use one more from this group. Consumer staples is only 4% of the mid cap indices, so I am already over-weighted.

Many of these stocks have bounced in the last few weeks. MGPI is a very interesting idea. I am passing of the liquor companies, even as they make new lows. Ask your wife, girlfriend, and/or mistress about Estee Lauder, I remain confused. There are some questionable balance sheets in the group (Hain, Dole, Energizer, and Estee Lauder)

These are my favorite ideas in order:

1. MGP Ingredients - MGPI - $91 - great success in small liquor brands

2. ConAgra - CAG - $31 - boring, but frozen food is still growing

3. Lamb Wesson - LW - $63 - did they try to grow too fast?

4. SunOpta - STKL - $6 - I still need to understand more, solid quarter

5. Ingredion - INGR - $132 - solid, but boring

6. Fresh del Monte - FDP - $28 - unusual management

7. Dole - DOLE - $16 - need to know more

8. McCormick - MKC - $79 - I love their sauce business

9. Philip Morris Intl. - PM - $120 - great strategy, but running away

10. Keurig Dr Pepper - KDP - $36 - coffee is confusing

11. Sysco - SYY - $77 - very well run, can restaurants recover?

12. Archer Danials - ADM - $61 - some regulatory risk

13. Molson Coors - TAP - $54 - did not take advantage of AB’s struggles

14. Duckhorn Portfolio - DUCK - $7 - wine, made a poor acquisition

15. Flowers Food - FLO - $23 - bakery, slow moving turnaround

16. National Beverage - FIZZ - $46 - silly dividend policy

17. Energizer - ENR -$30 - need to review again

18. Spectrum - SPB - $92 - batteries, too expensive now

19. Pricemart - PSMT - $89 - Central American Costco, great operators, expensive

20. Boston Beer - SAM - $282 - need to learn more

21. Cal-Maine - CALM - $71 - complex story, waiting for a problem

22. B&G Foods - BG - $8 - needs to eliminate the dividend

23. WM Kellogg - KLG - $18 - not exciting

24. Glass House - GLASF - $9 - very interesting, but has had a big run

25. Hain Celestial - HAIN - $6 - the balance sheet is the issue

26. Limoneria - LMNR - $22 - has been doing too well

27. Alico - ALCO - $29 - tree fungus is a problem

28. Seaboard - SEB - $3052 - Tyson is simpler

29. Primo Water - PRMW - $22 - doing too well

30. Chefs Warehouse - CHEF - $40 - too expensive

31. Reynolds Consumer - REYN - $31 - tin foil, too boring

32. Campbell Soup - CPB - $51 - not a fan of their diversification

33. Estee Lauder - EL - $94 - ask your wife, girlfriend, and/or mistress

34. Brown Foreman - BF.B - $45 - hate their distributions strategy

35. Post Holdings - POST- $117 - doing too well

36. Smuckers - SJM - $122 - getting cheaper, need to learn more

37. Clorox - CLX - $153 - getting more interested

38. Danone - DANOY - $14 - dairy, never trust the French

39. Mondelez - MDLZ - $71 - well run, still expensive

40. Diageo - DEO - $135 - really hate the “upselling” strategy