On tonight’s MAD MONEY on CNBC, Jim Cramer was going over his play on how to win from lower hog prices. Apparently pigs and hogs were not slaughtered enough and the breeding drove up supply. He had two stocks he likes in this:
- Smithfield Foods (NYSE: SFD)
- Hormel Foods Corp. (NYSE: HRL)
But he really likes Hormel better, and noted strong Spam sales and other brands. He thinks they have better exposure to the savings off of a supply surge in pork as it buys more of its pork than Smithfield. He also noted that the company beat earnings estimates. He noted that Hormel probably only has $3.00 downside here, but it’s probably going to $48.00.
Sometimes you can’t make this up, even though it makes sense when defensive stocks still rule. This was actually one of our own defensive stocks we track, although it isn’t currently on our defensive stocks with a value tone for the start of this year.
Jon C. Ogg
March 12, 2008
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