These Stocks Beat Shipping Stocks

At one time -- what now seems like eons ago -- shipping companies could do no wrong. Dayrates and stock prices were soaring, along with investors' portfolios, laden with carriers scrambling to expand capacity. But today's a different story, and I've found investments from another sector that are beating the pants off shipping stocks -- and I know where you can find out more about them.

Would the real hot stocks please come forward?
The nearly 5,400 stocks that more than 120,000 Motley Fool CAPS community members have rated include descriptive "tags" that group them with other companies sharing similar qualities -- a country of origin, a sector, or an end product, for example. Clicking the Dry Bulk Shipping tag pulls up a list of 15 stocks that have lost a whopping 63.5% in the past year.

But CAPS tags can lead you to stocks that have held up much better than the Dry Bulk Shipping group: Food Products. This group comprises 92 companies that have outperformed the returns of the broader market, and the Dry Bulk Shipping group, with only a 28.9% average loss in the past year.

Each group has its share of winners and losers, of course, but CAPS can be a great resource for zeroing in on potential opportunities in each area.

From macro to micro
You can sort tag groups by their CAPS ratings, from one to a maximum five stars, and then see which players -- from Wall Street to Main Street -- are bullish or bearish on a company, and why.

For instance, here are a few of the stocks in the Dry Bulk Shipping group:

Company

CAPS Rating (out of 5)

1-Year Performance

 

 

 

Euroseas (Nasdaq: ESEA  )

*****

(59.1%)

Genco Shipping & Trading (NYSE: GNK  )

****

(82.9%)

TBS International (Nasdaq: TBSI  )

****

(84.8%)

Source: Motley Fool CAPS and Yahoo! Finance, as of Dec. 9.

Now, based on the interest in the CAPS community, here's a sampling of Food Products stocks that investors may want to consider.

Company

CAPS Rating

1-Year Performance

Unilever (NYSE: UL  )

*****

(38.5%)

General Mills (NYSE: GIS  )

****

0.8%

Kellogg (NYSE: K  )

****

(22.3%)

Source: Motley Fool CAPS and Yahoo! Finance, as of Dec. 9.

General Mills
As one of the few companies in the S&P 500 that is still up this year, General Mills recently rung in its 80th anniversary on the New York Stock Exchange. Its long tenure and stability over time has enticed investors recently, as has the prediction that more consumers will be eating at home and turning to grocery stores for food rather than eating out.

Many food stocks like General Mills and Kraft (NYSE: KFT  ) have been serving as financial comfort food for investors, as they've been able to deliver growing revenue in the challenging market. While costs have been rising dramatically -- and even knocked profits down 3.6% in the most recent quarter -- General Mills has been able to raise prices to blunt the impact. And the higher prices haven't significantly reduced demand for Cheerios, as overall net sales grew by 14% in the quarter.

While Wall Street analysts would like to see slightly higher earnings per share than what General Mills is projecting for fiscal 2009, the company still expects positive sales and operating profit growth. Add in profit margins that are notably fatter than other food stocks, and it's no wonder 93% of the 683 CAPS members rating General Mills expect it to outperform the market.

Kellogg
Cereal maker Kellogg is another food company in a position of strength that allows it to increase prices, as grain and energy costs have risen dramatically. The company’s third-quarter profit rose 12% to $342 million, as its frozen foods business has been booking double-digit sales growth for a large part of this year. And despite tough competition from rival General Mills, its cereal business has been growing faster than last year.

The company recently said it expects 2008 earnings to come in closer to the higher end of its previously forecasted range, but a stronger dollar and commodity cost increases will likely weigh on earnings. But even with the challenges, many companies that make boring products, like Kellogg or Johnson & Johnson, can hold up better than others in bad economies. A consistent dividend also keeps Kellogg on investors' shopping list, as 91% of the 626 CAPS members rating Kellogg are bullish.

Before you buy ...
Of course, what's happened in the past is no indicator of where investors should be putting their capital now. But the underlying reasons behind price moves in stocks or groups of stocks can clarify trends that may significantly affect investments. Just make sure to do your own due diligence rather than simply following crowds or individual recommendations.

The Motley Fool Income Investor service scours the market for solid investments paying investors money to hold shares. See which dividend-paying firms have the service besting the market by 3 points today with a free 30-day trial.

When it comes to running long distances, Fool contributor Dave Mock lags more than he leads. He owns no shares of companies mentioned here. Johnson & Johnson, Unilever, and Kraft Foods are Income Investor selections. The Fool's disclosure policy beats all other disclosure policies, year in and year out.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 791374, ~/Articles/ArticleHandler.aspx, 10/24/2014 3:20:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement