Chef at home plays a role of reflection after a pandemic driven by the purchase of spike allowed a large number of these issues for the 52 weeks highs, but American food habits may have changed permanently, especially among the millennials who grew up on fast food diet rather than learn the intricacies of baking, broiling or frying. Accordingly, the current drop could provide a buying opportunity, and strong dividend income at a time when profit margins are in a hurry to get to the bone.
A recent consumer survey by investment bank Piper Sander offers “a 15% – 20% sustainable lift to the food cooked at home.” More than 70% of respondents said that they will continue to cook at home more often, after the pandemic runs its course, with the group waiting to consume an average of four or more meals per week at home. More importantly, in the short-term, 53% said that it is “unlikely or uncertain” if they are going to come back for the restaurants, once they have all reopened.
The strong likelihood of a second infection wave of the fall and winter should keep a floor under these questions, and this, regardless of long-term changes of paradigm, with less than four months before temperatures begin to fall in the Northern Hemisphere. In return, cautious investors may wish to keep a watch list of the most beneficial plays, with an eye on forward dividend yields, which have declined as a result of the rebound and the surge in bond markets.
Campbell Soup Company (CPB) shares posted a new high at $ 62.88 in 1998 and went into a persistent decline, which has found support from the upper teens in 2002. The stock has retraced about half of these losses in 2007 in excess of $42.65 and posted a rise in long-term low during the economic collapse of 2008. The subsequent uptrend completed a 100% retracement of the last century peak in 2016, which gives an escape that failed, seven months later, generating a sharp decline in January 2019 six-year low.
The increase in subsequent inverted after rising above the .618 Fibonacci sell-off of the retracement level in March, with the stock now sitting on top of a 50-month exponential moving average (EMA) in the mid-$40. The monthly stochastic oscillator is trying to cross in to buy a cycle at the same time, but a large movement in either direction is probably not until the June 3 earnings report. The stock currently pays a 2.97% forward dividend yield.
General Mills, Inc. (SIG) stock, posted a three-year low, to $10.31 in 1994 and turned over in an upward trend, which was relieved rapidly by an increase of the channel, whereas the violations of the assumption of the channel in 2000 and in 2009 attracted strong interest from buyers which reinforces this persistent. 2016-channel escape failed as well, triggering the downward trend that has burst on to the support, in a decisive way, in 2017, to the front of a downdraft that ended after six years in the $30 in December 2018.
The 2020 bounce reversed at the .786 Fibonacci sell-off in the level of retracement two weeks ago, with the benefit of hindsight now extending over about five percentage points. Similarly, the monthly amount of the stochastic oscillator is committed to a strong buying cycle, indicating that the bulls remain in charge long-term price action. As Campbell, the 50-month EMA looks like a parquet floor for General Mills stock, before an assault on the resistance in the middle of$60. General Mills currently pays a 3.27% dividend and report earnings, 24 June.
B&G Foods, Inc. (BGS) came public at $13.50 in May 2007, the immediate capture of the bearish trend that has posted an all-time low at $ 2.54 in October 2008. The subsequent reversal of the wave to complete a round trip in the ipo, opening of printing in 2011, generating an escape that have posted strong returns in July 2016 all-time high of $52.84. An accelerated retreat in 2017, the break of support in the mid$30 to mid-$20s before dropping back to near the 2011 breakout level on March 12.
The slight increase in May featured a breakout above the three-year trend of lower highs (black line), the improvement of the technical bearish outlook, but the rally has not clearly broken support at the 2018 low (red line). It is also below the 50-month EMA at $26, raising some doubts about the rally’s sustainability. Therefore, investors should wait for the purchase of a peak above the moving average before considering a long side of the entrance. The stock currently pays a big 8.50% dividend.
The Bottom Line
Chef at home plays a role pulling back after strong rebounds, but these stocks may offer substantial increase in the coming months.
Disclosure: At the time of publication, the author held Campbell Soup shares in a family account, but no positions in other stocks mentioned.