Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Mondelez International Among Three Analyst Food Industry Top Stocks

By Rhian Hunt - Jan 12, 2021 at 9:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Jefferies thinks this trio of food companies may be worth chowing down on in the near future.

A trio of food industry companies received a bullish rating today from financial services company Jefferies Financial Group, including cookie and cracker maker Mondelez International ( MDLZ 1.93% ). The other companies highlighted by Jefferies analyst Rob Dickerson in today's analysis are snack foods manufacturer Hostess Brands, Inc. ( TWNK 2.75% ) and frozen foods company Nomad Foods ( NOMD 0.96% ).

Two of the three companies Jefferies recommends have recently made acquisitions, demonstrating their focus on continued growth, plus strong enough resources to pursue a strategy of expansion. Mondelez purchased Hu Master Holdings, a "paleolithic" healthier chocolate maker. Meanwhile, Nomad Foods is preparing to acquire several successful European frozen food brands from Fortenova Group.

A growth chart showing a rising trend into 2021 after COVID's 2020 impact.

Image source: Getty Images.

Dickerson says in his research note that Mondelez is "advantageously positioned in faster-growth snacking categories and benefiting from its global scale," while Nomad Foods "remains very well capitalized, leading likely to further repurchase and/or acquisition activity." The Jefferies analyst states the value of Nomad's acquisitions hasn't yet been priced into its stock by the market.

As for Hostess, Jefferies thinks the company's margins and top line will both grow vigorously in 2021, the latter "driven by C-store recovery, distribution gains, base innovation, and acquisition revenue synergies." Hostess Brands also received a thumbs-up from JP Morgan last month, with the investment bank's analyst Ken Goldman remarking, "We see no reason why TWNK should not be a strong outperformer in 2021."

Snack food companies such as Mondelez got a huge boost during the early days of the COVID-19 pandemic in the U.S., as did frozen food sellers like Nomad. The same companies appear poised to profit significantly again during the rebound expected from the continued rollout of COVID-19 vaccination.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mondelez International, Inc. Stock Quote
Mondelez International, Inc.
MDLZ
$61.42 (1.93%) $1.16
Nomad Foods Limited Stock Quote
Nomad Foods Limited
NOMD
$24.23 (0.96%) $0.23
Hostess Brands, Inc. Stock Quote
Hostess Brands, Inc.
TWNK
$17.56 (2.75%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.