Stocks in the food industry are rising as consumers become more willing to pay higher prices.
Stocks in the food industry: Investors restored interest in lagging food stocks on Wednesday as many major names in the sector detailed their plans to fight rising input prices at the 2021 Barclays Global Consumer Staples Conference. Due to these worries, the Consumer Staples Select Sector SPDR Fund (XLP), the sector’s flagship bellwether exchange-traded fund (ETF), has underperformed the S& P 500 by approximately 4% over the last three months. On Wednesday, however, the fund outperformed the large-cap index by approximately 1%, owing to reassuring plans of action from major industry players.
We take a deeper look at what The Kraft Heinz Company (KHC) and General Mills, Inc. (GIS) stated regarding pricing and spending plans during the conference. We’ll also look at the charts to see if there are any trading possibilities.
The Kraft Heinz Company is a food manufacturing company based in the United States (KHC)
Kraft Heinz is the third-largest food and beverage company in North America, after PepsiCo, Inc. (PEP) and Nestlé S.A. It is well known for Heinz Baked Beans and Heinz Ketchup (NSRGY). Investors were informed that Kraft Heinz has raised pricing across approximately two-thirds of its U.S. portfolio and that it is prepared to raise prices more if necessary to offset increased input costs. “We’re taking the appropriate price measures to control the cost inflation we’re experiencing right now, including effects that will likely go into next year,” said Paulo Basilio, Global Chief Financial Officer.
The business also said that it intends to improve its marketing and sales skills in order to increase consumption and promote repeat purchases while aggressively controlling expenses. Kraft Heinz stock has a 4.49 percent dividend yield as of September 9, 2021, but is down 13.89 percent year to date.
Despite an alarming “death cross” on the chart yesterday, the stock price rallied well from key support around $34, suggesting that buyers are ready to reenter the company at current levels. Active traders who buy here could expect a rise back to major resistance around $44 and consider putting a stop-loss order below the weekly low of $35.38.
General Mills, Inc. is a food company based in the United States (GIS)
General Mills is a major worldwide packaged food business that manufactures snacks, cereal, yogurt, baking mixes, pet food, and ice cream, with a market value of $36 billion. At the Barclays conference, the parent company of Cheerios, Yoplait, and Betty Crocker reaffirmed its commitment to price measures and other cost-cutting initiatives to balance rising ingredient costs and other expenditures. Rising inflation is expected to add up to 7% to the business’s cost of goods during the next fiscal year, the company said in July. Due to two months of price increases across most of its grocery categories, the packaged food giant now expects full-year net sales and adjusted profits to come in at the upper end of its previous forecasts.
Stocks in the food industry
Management also said that its Accelerate strategy, which focuses on brand development, continuing innovation, growing possibilities, and community initiatives, will be continued. The stock of General Mills yields 3.44 percent and has fallen by 4.41 percent since early June.
On above-average volume, the stock rose from the bottom trendline of a falling channel on Wednesday, boosting the chances of an upward breakout in the next trading days. The stock also finished above the widely observed 50-day simple moving average (SMA), confirming yesterday’s positive trend. Those that purchase in this range may consider leaving in the resistance zone between $64 and $65. Set a stop below yesterday’s low at $57.93 to protect against a rapid reversal.