As Foolish investors, we know that the latest word from Wall Street is often best taken as a source of amusement, rather than as ivory-tower insight. But sometimes, the Street does get it right -- and that appears to be the case with Ralcorp Holdings
As cash-strapped consumers abandon brand loyalty and wheel their grocery carts toward the cheap stuff, Ralcorp is well positioned to benefit from its full line of snacks, sweets, condiments, and sauces. Now it's enjoying an analyst upgrade, a Forbes endorsement, and even a big "boo-yah" from Jim Cramer.
To understand why, just keep an eye on fellow shoppers' buying habits the next time you're at the supermarket. Even if you can only identify a move from, say, ultra-pricey Hain Celestial
But Ralcorp would be an attractive investment even without the trade-down effect. In its fourth quarter of 2008, 68% of its sales growth came from Post Foods, which it acquired from Kraft Foods
Ralcorp isn't a classic blue-chip name; but many such stalwarts have revealed an inner shade of periwinkle in 2008. And as fellow Fool Julie Clarenbach recently counseled, playing traditional defense in today's nontraditional market is a dangerous game.