Hostess Brands (TWNK) is one of the better growth makanan khas jawa tengah stories in the group, thanks to the popularity of Twinkies (hence the ticker) and successful product innovations like mini Bundt cakes.
A strong U.S. farm economy helps Deere (DE), the top producer of agricultural equipment, and Agco (AGCO). Bunge (BNGE), a leading agribusiness company, stands to benefit from wider “crush margins,” or profit on turning crops like soybeans into oil.
Higher food inflation tends to bolster grocers like Kroger (KR) and Albertsons (ACI) with wider margins, thanks in part to a shift to higher-profit private-label brands.
Restaurant stocks have lagged behind the broader market this year. McDonald’s (MCD) is off 11%, to $237, while Starbucks is down 25%, to $88. Investors are worried that consumers are being squeezed by higher food, gasoline, and rent costs and will be less inclined to eat out.
“We think it’s an overreaction,” says Andy Barish, the restaurant analyst at Jefferies. “The industry is still seeing really good demand trends, and companies are taking significant pricing.”
Food typically accounts for about 30% of restaurant costs, with those expenses projected to be up about 10% this year.
Valuations have come down in the sector, which now trades around 18 times projected 2023 earnings—not cheap, but below the three-year average of 25.
Barish likes the casual-dining sector, which “is in the best shape in 20 years.” He points to a shakeout in independent restaurants during slot gacor malam ini the pandemic as well as industry initiatives to boost margins, like simplified menus, more takeout business, and labor-saving kiosks for ordering meals.