5 tasty food and beverage stocks under $10
These companies all have room to grow along with consumer tastes.
By Karen Riccio
The time between Thanksgiving and the end of the year is special for so many reasons. The one that stands out in my mind: so many of us throw diets out the window and throw all the treats in in front of us into our mouths.
We do imbibe more than usual during the winter holidays. For example:
- North Americans consume about 24 million turkeys and 112 million cans of cranberries.
- We glug 108 million quarts of eggnog and 89 million gallons of liquor.
- The average weight gain during the Christmas holidays is four to six pounds.
- The average American will consume more than 4,500 calories and 229 grams of fat on Thanksgiving Day alone.
So in the spirit of holiday indulgence, here are five great food-and-drink-related stocks for under $10:
Inventure Foods (SNAK)
Here’s a stock ready and able to take advantage of yet another statistic: World snack food sales will top a third of a trillion dollars by 2015. Inventure Foods specializes in developing and distributing snack food products. For the third quarter of 2013, net revenues increased 17% to a record $54.5 million year over year.
Inventure just acquired Fresh Frozen Foods, with 15% average annual revenue growth over the last three years and gross revenues over $60 million during the most recent 12-month period. SNAK is up 27% over the last three months and up 68% year-to-date.
Chiquita Brands (CQB)
Banana king Chiquita Brands is trading just under $10, but some analysts believe it is undervalued and expect the stock to ripen to $15 per share.
Although Chiquita Brands stated lower-than-expected earnings for the third quarter, which pushed the stock lower, its revenues increased slightly from $716 million to $723 million in the quarter. A new CEO, Edward Lonergan, has experience turning companies around.
In addition to its international business of sourcing, distributing and marketing bananas, the company's Salads and Healthy Snacks division markets includes ready-to-eat, packaged salad ingredients, other healthy snack items, fresh vegetable and fruit ingredients used in foodservice and processed fruit ingredients.
What else can you say about a stock that’s up 90% year-to-date and trading for under $9 per share? In order to cater to more to high-end consumers, Wendy’s is offering premium sandwiches with the hope of accelerating sales and improving margins.
The company is also changing its business by selling company-operated stores to franchisees, which will significantly cut working capital needs while providing more reliable income streams. Based on its current average selling price, future sales should generate an additional $170 million in cash.
Cott Corp. (COT)
Cott Corp. is a beverage company that produces beverages on behalf of retailers and distributors. The company mainly does business in the United States, the United Kingdom, Canada and Mexico, but it also sells beverage concentrate in 50 other countries.
Deutsche Bank rates Cott as a stock to buy and has an $11 price target. The consensus is posted at $10. Investors are paid a more-than-decent 2.9% dividend. Cott recently closed at $8.28.
Panache Beverage (WDKA)
Panache Beverage is an alcoholic beverage company that develops, sells and markets spirit brands, which include Wodka Vodka, Alibi American Whiskey and Alchemia Infused Vodka.
The New York City-based company was founded in 2004. Its stock currently trades at 37 cents per share; trading is extremely thin with a 9,500 average volume. The stock is down over five, three and two years, but is up 32% over the past three months.
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