PittsburghGourmet's  Instablog

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I buy and sell stocks for fun and profit. I am in no way a professional. Caveat follower.
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Tasty Stocks
  • Pay For Your Spices By Buying MKC 0 comments
    Aug 3, 2014 1:06 PM | about stocks: MKC

    20% of my grocery bill today was $15 for spices. I was cooking Indian food, and was out of cloves and cinnamon sticks. The prices are highway robbery, but I paid them at my local grocery store for the convenience.

    The actual price of these spices is generally quite low. Packaging them, transporting them to stores, and selling them is very lucrative. What does that have to do with Seeking Alpha?

    My spices were made by McCormick (NYSE:MKC). A fun game I like to play with many things I buy is: What do I like more, the product or the stock? And how much of the stock do I have to own so that the company is paying me, instead of me paying the company? Let's assume, for the sake of argument, I buy $30 in spices a month. Similarly situated foodies are doing the same thing, and we're relatively insensitive to prices. If you're a foodie, spices are a non-discretionary purchase. I still bought them despite getting hammered in the markets the last few days.

    So when I got home, I took a look at the stock. I like this article:


    Strong company, great brand. Like the emerging exposure, which I wasn't counting on. Nice bonus over and above the domestic demand.

    And also this one:


    An $18,000 position would produce $30/month in dividends, and I believe the company is likely to become attractive to investors in a down market. It's down 8% for the year, but was up on Friday when everything else was flat or down. It could trade down a bit towards it's 52 week lows from February around 63, and if it does so, I find it even more attractive. I think there's a good chance that before the end of the year it trades back up above 70, which would be a 4-9% appreciation (from 66 and 63, respectively). Adding in the 0.5% dividend yield for three months, it could take less than $1000 to produce $30/month!

    McCormick and Company, buy my spices for me! I think I like your stock even better than your product! I rated it as my #1 "Tasty Stock" on my blog:


    Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in MKC over the next 72 hours.

    Stocks: MKC
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