Ralcorp Holdings: Enjoy a Good Bowl of Recession

Bloomberg TV ran a nice story on Ralcorp (RAH) yesterday morning. RAH produces generic foods and recently purchased Post cereals from Kraft (KFT).

In this economy more consumers are going to trade down to cheaper (or as we say in economics, inferior) priced goods. RAH should benefit from this shift in consumer purchasing habits.

Furthermore, RAH products are in the consumer staples sector which is rather inelastic relative to price changes. Lastly, input prices for RAH are in steady decline. In the most recent issue of the LakeView Restaurant and Food Chain Newsletter I discussed RAH in greater detail.

Disclosure: At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC was long shares of RAH --- although positions can change at any time.

Comments

[Urbane Gori...:]

RAH seems a little toppy here.... Suggest also looking at THS (Treehouse Foods) which is in the same line of business, or Flowers (FLO) a bakery, if you really want foodstuffs. Both still have just pulled off a bottom and should move up with the market.. (IMHO)

jegan

2008 Nov 13 05:00 PM