There really is a Santa Claus, as far as investors are concerned. Against the odds, stocks moved higher last week by about 2% with the help of decent existing-homes sales and lowered continuing claims. Never mind the fact that those two items were the only encouraging news.

ConAgra Foods Inc. (CAG) reported encouraging results for the second quarter of 2010, with earnings of 52 cents per share. Earnings were well above the Zacks Consensus Estimate of 47 cents and were up 44.7% year over year.

Total revenue for ConAgra declined 2.4% to $3.1 billion as the Commercial Foods segment declined 11.4%. This was partially offset by a 3.0% increase in the Consumer Foods segment.

Q2 2010 Earnings Call

December 21, 2009 9:30 am ET

ConAgra Foods, Inc. (CAG) – The food company responsible for such brands as Chef Boyardee, Hebrew National, and more, attracted bullish option players today. Shares rose slightly by 0.05% to $22.61. One trader banked gains on a previously established long call position. It appears the investor originally purchased 5,400 calls at the December 22.5 strike for 15 cents apiece back on November 4, 2009, when shares were at $20.89. Today the trader sold all 5,400 calls for an average premium of 37 cents per contract to secure net profits of 22 cents per contract. The same investor ramped up optimism on the stock by initiating a new long call position in the March 2010 contract. The trader purchased 5,400 calls at the higher March 25 strike for 25 cents premium apiece. The optimistic investor breaks even on the new position if shares rally 12% from the current price to surpass the breakeven point at $25.25 by expiration in March 2010.

New York Community Bancorp (NYB) – – News last week that this 212-branch community lender would take on the seized assets of AmTrust Bank saw its shares jump 10%. Lucky investors were treated to a further 8.5% on Monday to $13.40 as the bank said it would finance the takeover with the sale of 60 million shares. While the medium-term outlook maybe pretty bullish since it will expand by more than one third its number of accounts at a stroke, near term bears spent an average of 19 cents to lock into protective put option plays that would compensate them in the event that shares suffered a hiccup before options expire in two weeks time. Elsewhere happy banking bulls were keen to buy calls expiring in January at the 12.5, 14 and 15 strikes indicating that a successful takeover at AmTrust will attract more investors in the coming months.

People gotta eat. One thing that we all have in common is that we wake up hungry every day. Therefore, companies in the food business tend to be very stable and rather consistent long-term growers. Most pay dividends that grow with their earnings; some even grow earnings and dividends at above-average rates.

The stock market, on the other hand, is not always consistent, or for that matter, rational. Even though they possess the attributes mentioned above, below we report on five blue chip food related stocks that can be bought today at values (PE ratios) that are below S&P 500 Index levels. Better yet, they offer a higher blended yield than a ten-year Treasury bond. However, unlike the bond, the dividend grows each year, therefore, the yield increases over time. We call this growth yield.

Since my last update, nearly three months ago, the Basic Food Fund, or “BFF,” has risen 6.4% from $182.93 to $194.66 versus an 8.4% increase in the Dow. Its poor relative strength could be attributable to its lower beta status (lower beta stocks drop less in down markets but rise less in up markets) since its components are defensive in nature. Meltdowns in three securities didn’t help matters either, as both Luby's (LUB) and Winn-Dixie (WINN) received 20% haircuts, while CKE (CKR) took a 12% hit. Big winners in the index were The Great Atlantic and Pacific Tea Co. (GAP), soaring 66%, Smithfield Foods (SFD) rising 33%, Sara Lee (SLE) up 30% and Tyson (TSN) adding 12%.

• SLE: Everybody seems to love Sara Lee these days, as the shares have made another 52-week high. The pie and cake maker has seen a abundance of good news lately: (1) it beat 1st quarter earnings estimates and raised guidance, (2) Unilever (UL) bought part of its global body care and household products business for a better than expected $1.9 billion price tag (3) Both Procter & Gamble (PG) and SC Johnson have expressed interest in purchasing its air freshener business for as much as $700 million.
• IPSU: Imperial Sugar (IPSU) announced a joint partnership to build a new refinery at its Gramercy, Louisiana location. IPSU, Cargill and Sugar Growers and Refiners Inc. will each invest $30 million in assets to build a new state of the art refinery on a 207-acre parcel that IPSU is contributing to the new three way partnership. IPSU’s lone analyst also released bullish research notes and reiterated his $20 target price.
• BRID: The snack food company, Bridgford Foods (BRID) made a new 52-week high at $9.99 on news that the company was issuing a ten cent special dividend. Buyers are also banking on further earnings improvement when the company reports its 4th quarter results next month.
• SFD: Duetsche Securites upgraded its opinion on the pork producer from a hold to a buy, citing improving industry fundamentals, propelling the shares pennies from a new 52-week high.
• TSN: The company announced a new CEO, Donnie Smith (a longtime TSN executive) and is expected to report fourth quarter sales of $6.88 billion and earnings of 27 cents when it reports Monday. Two recent downgrades from JP Morgan and BB&T Capital Markets have kept the share price in check, but an earnings blowout could set the stage for an impressive rally.
• CAG: With a 3.6% dividend yield and a multiple of only 13 times 2010 earnings estimates of $1.69, it is no surprise why UBS recently raised its opinion on ConAgra (CAG) from a neutral to buy rating.
• WINN: The Grocer reported poor first quarter results prompting a beating in the share price. As a result, Activist Investor George Schultze, (his Schultze Asset Management firm owns 1.5%) wrote a letter to the Board requesting them to evaluate other alternatives (besides store remodels) to enhance shareholder value, such as a stock buyback or entire sale of the company. We will see how this develops.
• SWY: Safeway (SWY) reported solid third quarter earnings, beating the street by a penny. Although sales were down 7%, the company was still able to expand it gross profit margin by 78 basis points to 28.27% and buyback 23 million of its own shares.
• GAP: Buyout rumors are fueling this stock’s meteoric rise
• SVU: SUPERVALU (SVU) slashed its annual cash dividend from 70 cents to 35 cents, to help facilitate its decision to double the size of its Sav-A-lot division from 1200 stores to 2400 stores. An initial $75 million has been earmarked for the endeavor. About 75% of the stores are run through license agreements. Even though the dividend was cut by 50%, the yield is still a generous 4.6%.
• CKR: The burger chain has gotten into a price war with McDonalds and in my unbiased opinion (okay maybe it is just a little biased), is beating them badly. The company’s “Big Carl” is nearly twice the size of MCD’s Big Mac at a lower price, and its famous $6 burger has been slashed to $2.79. The burger chain is also offering a loyalty “rewards” card, giving customers even more incentive to come back. I guess if you can’t beat them, then “undercut them”, by giving the customer twice the product at less the cost. I just hope this strategy does not backfire .The stock is simply oversold and due for at least a “dead cat bounce”.
• DLM: Selling at one half book value, a forward multiple of 12 times 2010 earnings estimates and a 2% dividend yield to boost, Del Monte's (DLM) stock still appears cheap even after a substantial rise. Wall Street is apparently spooked due to its $1.5 billion debt load, and so am I.
• FLO: The bread maker, Flowers Foods (FLO), reported third quarter earnings of 34 cents, matching analyst expectations, but was short $14 million on the top line due to increased promotional activity. The company revised its fiscal year guidance from $1.43 to $1.40, creating a nice buying opportunity ,as the stock overreacted in a unjustified selling stampede. This one is headed back up to $26.
• KR: The newest addition to the index, stacks up to be a stellar performer. We shall see.

There is a scene in the movie “Animal House” (which completely rips off Dr. Suess’ “Horton Hears a Who” in one fell swoop but that’s a story for a different day) where a small group is at Professor Riegert’s house and after the room fills with a certain scent the discussion gets a bit heady and the concept that our entire universe could be on the head of a pin in another, larger, universe is proposed. Grand stuff for sure but in the good professor’s case merely an attempt to raise Pinto’s awareness of a world outside of his own “Private Idaho”.

So with the perspective one probably only gets while riding in the space shuttle, and I am right here on earth I can assure you, I would present to you this morning a cure for world hunger and it all starts, if can imagine it, with pancakes.

Stocks discussed on the lightning round session of Jim Cramer's Mad Money TV Program, Friday November 13.

Bullish Calls:

Devon Energy (DVN): "We prefer Devon (to Chesapeake)."

In early October I detailed 2 high yield investment strategies (part 1 and 2) that have had a history of outperformance. Below is the list of stocks meeting the two strategies criteria as of the close on November 6th. Obviously, past performance does not mean these strategies will continue to outperform in the future. However, a variety of momentum strategies (part 1) have been detailed extensively on Scott's Investments and the high yield momentum strategy is similar in nature to other successful momentum strategies.

Ticker	Company	Free Trend Analysis	Dividend Yield	Performance (Half Year)	200-Day SMA	Price
RRD	R.R. Donnelley & Sons Company	Here	4.96%	62.64%	56.30%	20.98
PLD	ProLogis	Here	5.18%	41.74%	30.86%	11.58
VTR	Ventas Inc.	Here	5.24%	39.60%	27.39%	39.13
MRK	Merck & Co. Inc.	Here	4.66%	37.05%	16.79%	32.59
LEG	Leggett & Platt, Incorporated	Here	5.35%	32.52%	26.41%	19.44
HCP	HCP, Inc.	Here	6.63%	32.08%	21.15%	27.75
EQR	Equity Residential	Here	4.68%	30.54%	22.54%	28.85
HCN	Health Care REIT Inc.	Here	6.45%	29.82%	17.89%	42.14
DTE	DTE Energy Co.	Here	5.53%	27.29%	22.12%	38.34
TEG	Integrys Energy Group, Inc.	Here	7.61%	27.13%	15.73%	35.75
POM	Pepco Holdings, Inc.	Here	7.08%	27.06%	12.71%	15.26
SE	Spectra Energy Corp.	Here	5.17%	26.74%	18.48%	19.34

Although it appears the prospects for the producers of porcine products have prettied, yes, lipstick included, that cannot be said for all of the ‘ole MacDonald’s in the country.

The U.S. Department of Agriculture reported recently that due to a late planting season and a cooler and wetter fall than normal, only 20% of the corn crop is out of the fields vs. an average of 58% during the years of 2004-2008.

There is a dichotomy occurring today. Gold is at record highs. Stocks are jumping. And bonds -- well, today's Treasury auction was oversubscribed.

If this does not have you scratching your head, it should. Because on the surface it does not much sense. So let’s break today's events down.

When selecting income investments, the three most important questions to answer are : 1) Is the investment increasing its dividend each year, 2) Is the increase likely to continue into the future and 3) Are you being compensated for the risk you are taking? When you answer yes to all three of the questions, you just might have found an excellent income investment.

Last week, ConAgra Foods Inc. (CAG) raised its regular quarterly dividend by a 1 cent to 20 cents based on encouraging results for the first quarter of fiscal year 2010. The company has decided to pay the dividend on Dec. 1 to shareholders of record Oct. 30.

During the quarter, earnings excluding one-time items were 38 cents compared to 27 cents in the year-ago quarter. This was the above Zacks Consensus Estimate of 33 cents. Total revenue was $2,961 million from $3,052 million in the year-ago quarter.

Several companies raised distributions last week. The most notable raiser was fast food chain McDonald's (MCD), which surprised investors with a 10% dividend increase. This marked the 33rd consecutive annual dividend increase for this Oak Brook, Illinois based dividend aristocrat.

McDonald's Chief Executive Officer Jim Skinner said:

I'm getting more and more company in worrying about a market peak. If you, like me, are

1. Interested in green investing, and

First Coverage's weekly market sentiment report is still pointing to a bullish market (First Coverage). This week has seven sectors rated bullish, with three, including basic materials, consumer goods, and energy (oil and gas) rated neutral.

The weekly sentiment change has basic materials moving more bearish from last week with a 10.9% decline in sentiment (although still neutral), while health care has become more bullish. The financial sector has also failed to roll over, indicating that the sell-side has still not yet gone bearish, even with the big run-up in this sector over the last six months.

F1Q10 Earnings Call

September 22, 2009 9:30 am ET

Sentiment

Stocks are holding modest gains on another slow news day Tuesday. The major averages opened steady after markets across Asia and Europe moved mostly higher. A rebound in crude oil, which is up $1.84 to $71.77 a barrel, and gains in gold helped drive gains in some of the energy, metals and mining names. Gold added $10.40 to $1015.30 an ounce.

The only economic stat of the day came early after the FHFA released its Housing Price Index for July, which increased by .3 percent in July. Economists were looking for a .4 percent increase. The market didn't show much reaction to the news.

Today before the market opened, ConAgra Foods, Inc. (CAG - Snapshot Report) reported encouraging results for the first quarter FY2010 ended August 30, 2009.

Earnings excluding one-time items were 38 cents per share, compared to 27 cents in the year-ago quarter. It was the above Zacks Consensus Estimate of 33 cents. Total revenue was $2,961 million from $3,052 million in the year-ago quarter.