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The market is starting to look a little frothy! If you have been long with the right stocks, you have made some strong profits the last 18 months. With the normal summer, seasonal slowdown and strong gains year to date, the market is ripe for a pullback. This means less tech and more defensive stocks.

In this article we will highlight four defensive food stocks with strong quality of earnings and good growth potential but carrying a below average PE for the conservative investor. Defensive food stocks provide above average safety and stability during market corrections, thus they are a good way to diversify your portfolio.

  • American Intl. Pasta (AIPC)

AIPC is the leading private label producer of dry pasta. They compete in the growing value oriented pasta category versus the likes of Barilla and New World. The pasta category continues to enjoy good consumer growth and a favorable commodity situation. This should translate to continued earnings growth for AIPC. They sport a current PE of 10.6 which is 5 basis points below the food industry average of 15.5.

  • Del Monte Foods (DLM)

Del Monte is a leader in fruit, vegetable and pet food categories. In fruits and vegetables they continue to transition their products from lower quality canned items, to more innovative packaging with stronger freshness and quality appeal. In pet foods, sales have been strong, as the consumer has refused to neglect fido or little kitty despite tough recessionary times. Del Monte has a PE of 12.1.

  • General Mills (NYSE:GIS)

Big G is a leader in cereal, snack foods, soup and bakery products. They are currently facing heightened competitive pressures in their respective categories, but they offer one of the best portfolio's of brand names with top quality management. Short term results will be impacted by Ralcorp's Post divisions aggressive dealing in cereal,weakness in the soup category and weakness in the baking division. General Mills currently can be had a for low PE of 14.1 despite it being "Best of Breed" for the Food Manufacturer Category.

  • Ralcorp (RAH)

Ralcorp is the # 3 ranked branded and private label cereal manufacturer behind General Mills and Kelloggs (NYSE:K). (They also compete in bakery, frozen, snacks). They have struggled with volume and some integration issues with the Post division but overall they have a strong portfolio of branded and private label products. They are currently boosting volume through more aggressive promotions and expect to gain cost savings synergies from the Post integration. Execution is the key on this one for next 6 months. Ralcorp has a below average PE of 13.0

Disclosure: No positions