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Robert Taylor
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I hold a Masters in Business Administration and have been a professional writer and stock analyst for the last 3 years. I am a contributor to several other sites including InvestmentUnderground.com and write primarily on tech stocks.
  • Good Time For SOUP 0 comments
    Mar 12, 2013 7:02 AM | about stocks: SOUP, CPB

    It is a time-proven principle for success in business to find something and do it well, be it service or product. Look at Starbucks (NASDAQ:SBUX)which built an empire on a great cup of coffee, McDonalds, which focuses on food made to order within a minute or two. Almost endless examples exist of businesses that narrow their focus in order to achieve unparalleled success.

    It is the savvy investor who picks these gems before they peak. Some do this by looking at companies individually, and some look at sectors which are poised for profitability. One of these sectors which I see as an opportune and time-appropriate investment is the food sector.

    Food is consumer based and while spending will slow and perhaps even stop in several sectors when the economy dips, spending on food will not. Many consider the food sector to be a boring and slow growth sub-sector that doesn't deserve much thought. Truthfully, why would you take the opinion of an analyst?

    Consider cheating off the smartest guys in the room. One such savvy investor: Warren Buffet.

    Buffett saw a steady increase in the food sector before anybody else and spent $23B to buy Heinz (NYSE:HNZ). As of Feb 1st, Heinz was up by 25.57% since the beginning of the year. Heinz was not the only dividend stocks that soared:

    The J. M. Smucker Company (SJM) is up about +11.63% month.Pepsi (NYSE:PEP) has climbed +10.96%. These stocks have been beating both the market and most dividend indexes. Over the past decade food has not been a sector for major growth, but it has been one of the most reliable sectors with strong dividends.

    To be fair, when someone says 'soup', it usually sparks the thought of the biggest soup company by market cap (almost 13B) - Campbell's. The Campbell Soup Company (NYSE:CPB) has been looked at by analysts recently. One analysis company, Zacks, reaffirmed their 'neutral' rating on Campbell shares with a $44.00 target price on the stock. Other analysts, such as Credit Suisse, raised their price target on shares of Campbell Soup Company from $35.00 to $40.00, which is now an 'underperform' rating on the stock.

    But Campbell's is not the only competitive soup company. In fact, there is one that has been a 'silent mover' for the last few years. TheOriginal Soup Man (OTCBQ: SOUP) is quickly becoming the name on everyone's 'buy' list.

    The Original Soup Man began creeping into the subconscious through the hilarious character from Seinfeld (remember, "No Soup for You"?). But it hasn't just relied on humor. It's no-nonsense ability to focus on what it does well has made it a popular and thriving provider of premium soups. The Company leverages this brand recognition perfectly to capitalize on this steadily growing sector, as well as gain shelf space in many regional and national grocery stores.

    Leadership is the common theme when it comes to a company's success in developing and implementing a strategy. Arnold Casale will likely keep the company enjoying these impressive returns due to his steady-handed guidance through changes in the market and consumer trends.

    Casale knows the power of business can be multiplied through partners. Not only has he drawn in some heavy-hitters for advertising such as Seinfeld's Jason Alexander and NBA pro Shaquille O'Neal, but he has also joined forces with those who can make the Soup Man even bigger.

    First, the company is drawing from those with experience. Tim Gannon, the co-founder of Outback Steakhouse and the mastermind behind the growing of that franchise to over 1,400 has been asked to join the team. With wisdom from those who have already done it, The Original Soup Man is securing its continued success.

    Second, the company is going online. Multiplying its existing market, the SoupMan's national presence is amplified online via Amazon.com, making the company a bigger and wiser player in the food services industry. The Amazon Goliath has more or less dominated the online purchasing world, both with its own products and others. Millions of convenience-seekers just find a few clicks of the mouse a better alternative to gallons of gas, crowded aisles and indifferent cashiers. Access to more people than just shoppers is a great move for the company.

    But it doesn't stop there. The company is also aligning itself with public service and growing a solid reputation by supplying New York City schools with a specific version of its product. Not only will this be bolstered through support from high-profile athletes like Shaq, it will also increase the company's recognition and image as more than just a profit vehicle. The Company plans to expand its school-distribution beyond New York into other regions and municipalities during the coming years.

    So where is it going?

    This company is doing all the right things. Not only is it implementing a brilliant market strategy and building a team with proven leaders in the field, it is also focusing on a singular niche market. This prevents it from being mediocre in several things and allows it instead to be the best in one.

    In summary, food related companies will continue to grow their sales in a stable manner and their dividend will follow. After all, our global population is continuously growing and the very first thing most of us do with our pay check is go to the grocery store. Now that investors like Buffett have shown the world the importance of food with his transaction, it is expected that other companies will continue their growth this year. It may be not too late for investors to jump into some great stocks in this industry. Now is the time to 'think SOUP'.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SOUP, CPB
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