The US economy has been on a seemingly never-ending treadmill as of late. Primarily consumer spending driven, the economy has stalled on low consumer confidence levels, exacerbated by continuous media coverage of said low confidence levels, slow job growth, and home prices that seem to have no bottom.
These circumstances feed off of each other, creating a viscous cycle that continues to hamper real economic growth. All the while corporations have been posting record profits. It is true that while some of these profits are due to cost cutting and over-all spending reductions, some businesses are enjoying real growth and their stock’s have enormous upside potential.
It is possible to profit along with these companies if you know where to look. In time of economic uncertainty, looking to sectors and corporations that are “recession proof” with strong corporate fundamentals, and who’s stocks have room to run has traditionally been the best strategy for profiting in an uncertain market.
These factors can be found in two food sector stocks, who have enjoyed a nice run to the upside in the last year, have large market share, and show strong indicators that the share prices have continued upside potential. Both Papa Johns International Inc (PZZA) and J M Smucker Co (SJM) have proven to be money makers even when the rest of the market is falling and could be a valuable addition to a long-term investment strategy.
Get A Slice Of Papa Johns For Upside Potential In Your Portfolio
Even in the belt-tightening atmosphere of the past few years, pizza has remained a profitable business, as consumers eschew more expensive “splurges” in favor of more affordable options. Pizza has remained a way for people to treat themselves to a night out, or family night in, without breaking the bank.
For Papa Johns that has translated into serious profits, with revenues for the third-quarter up 11.9% from 2010 to $305.7 million, making this one of the best quarters for the pizza chain in the history of the company. As the company continues to grow, surpassing 3,000 restaurants in North America with plans to expand internationally by 800 stores, the company is poised to continue garnering profits and market share well into the future.
Papa Johns stock has risen over 38% in the past year and is currently trading in the $36 range, slightly off of its 52 week high of $36.74. There is upside potential in Papa Johns as the business continues to realize profits, and grow internationally, and the stock carries an analysts average price target of $41. Watch for opportunities to enter into long positions in the coming days, as pullbacks are likely to occur as Europe continues to hammer out a debt deal.
J M Smuckers Provides Upside Potential And Dividend Income
J M Smuckers has been in business since 1897, and enjoys an enviable portfolio of brand names including Pillsbury, Jif, Hungry Jack, Millstone, Folgers, Crisco and Dunkin Donuts and recently purchased Sara Lee’s coffee and hot beverage business in a 400 million dollar cash deal that is expected to boost annual net sales by 285 million dollars.
Shares of J M Smuckers are currently trading off of their 52 week high, and the stock is up by more than 20% year-to-date even in light of the turbulent market environment, with the carts showing continued upside potential for the stock in the future.
J M Smuckers also currently pays a dividend of 2.5%, which is ahead of the current yield on 10 year US Treasuries, making it a stable “pay to wait” play for a long-term investment strategy. While the stock is currently trading in the upper ranges at $79.45, buy into the dips with a long-time frame in mind for consistent yield and long-term upside potential.