Time to buy stocks of food companies?

Sector is cheap and provides some diversification for some investors.

The stock market is up largely due to the magnificent 7, however, not all sectors of the market are doing well. I looked at the stock prices of six large food companies – Pepsi, Tyson, Nestle, Kraft Heinz, General Mills, and Mondelez. Food stock prices are depressed.

Here is what I found when I looked at stock prices on Juneteenth 2025.

· Four of the stocks, Pepsi, Tyson, Nestle and Kraft Heinz are bouncing around their 52-week low.

· The returns needed to return to the 52-week high (in descending order) are 42 percent for Kraft Heinz, 41.5 percent for General Mills, 40 percent of Pepsi, 22.8 percent for Tyson, 14.6 percent for Mondelez, and 14.4 percent for Nestle.

· The ratings of the stock based on 1-year stock return are similar to the ratings by the amount needed to return to the 52-week high.

Notes:

Tariffs and higher labor costs from the immigration crack down appear to be adversely impacting returns on food stocks.

Food stocks are more attractive now than previously because they are substantially off their highs.

Concluding Remarks and Recommendations:

I often can’t give the same stock recommendation for all investors.

None of these stocks is going to make you rich because it is the future Nvidia. The return-risk tradeoff on all of these stocks is limited.

However, the group is inexpensive compared to history. It is not the only group that is inexpensive compared to history.

Investments in this group and other depressed parts of the market could provide some diversification to people who are overweight technology.