Food Stocks That Play Commodity Prices

Commodity prices have plunged, but you wouldn't know it from the prices at your local supermarket.  Jonathan Feeney of Wachovia Securities thinks that's a good reason to get involved in food company stocks.

"It's not because of the rising prices per se, but because consumers are looking for ways to save money, and eating at home is one of those ways," Feeney told CNBC.


He's especially enthusiastic about companies that produce so-called "private label" foods that supermarkets sell under their own brands.

"Ralcorp (Holdings) (NYSE: RAH) and Treehouse (Foods) (NYSE: THS) are names that we like in that space," he said. "Ralcorp makes cereal and a number of other items, Treehouse makes salad dressings and three or four other items as well."

A more familiar name is Kellogg (NYSE: K).

"These products offer a lot of value to consumers, people have shown that they're not willing to switch from them, and it's a reasonable way to eat at home," he said.


Feeney's firm owns shares of Ralcorp Holdings and Treehouse Foods, and his firm intends to seek, or expects to receive, compensation from the two companies for investment banking services in the next three months.


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