Mike Larson: I cringe at the thought of investing in most bonds, and I hope you’ve been paring down your exposure like I recommended. Just this week, the yield on the 30-year Treasury bond shot up to 3.23 percent.That was the highest since last April. And since bond prices move in the opposite direction of bond yields, losses are mounting rapidly for holders of long-term debt.
But that doesn’t mean I’m blind to opportunity. Far from it! I believe there are plenty of profits to be had in this market — and one of the best places to look is in your pantry!
Yes, your pantry.
Great Yields, Steady Businesses, Takeover Potential —
What’s Not to Like?
I won’t keep you in suspense any longer. I’m talking about the companies that make the soup and salad dressings we eat, the soda and bottled waters we drink, the diapers we change, the cleaning and paper products we use, and everything else we need on a daily basis!
Demand for these kinds of products is relatively inelastic. You’re still going to eat and drink whether the economy is booming or not. These companies are expanding worldwide into new emerging markets where growth potential is stronger than back home.
Many of them pay out handsome, above-market dividends. And more recently, they’re turning to acquisitions, spin-outs and other corporate maneuvers to boost the bottom line!
Take PepsiCo, Inc. (NYSE:PEP), a beverage maker whose shares I recommended to my Safe Money Report members recently. It just reported a 17 percent jump in profit from a year ago, thanks to increased marketing spending on its core brands and an ongoing restructuring.
Investors like what they heard, and its shares just exploded to their highest level since January 2008! Not only that, the stock still yields almost a full percentage point more than the 10-year Treasury note.
Then there’s the other piece of news that’s igniting investor interest in the sector: Warren Buffett’s Berkshire Hathaway just teamed up with a firm called 3G Capital to buy H.J. Heinz Company (NYSE:HNZ) for a whopping $28 billion! The price of $72.50 was roughly a 20 percent premium to the previous day’s closing price, underscoring the value that big-money investors see in Steady Eddie, higher-yielding food companies with global operations.
Where I’m Looking for Profits
Next in the Sector!
My Safe Money members are already seeing some nice gains on Pepsi. They’re also doing the same with another food company whose shares just hit their highest level in its 119-year history! So where do I think the NEXT big score could come from?
Well, there’s a company with a profile very similar to Pepsi. Nice yield. Restructuring underway. A prospective turnaround in its core businesses based on the introduction of new products and targeted acquisitions.
I’m close to pulling the trigger there, and I think the profit potential is substantial. Naturally I can’t share all the details here. That wouldn’t be fair to my paying subscribers.
But you have two choices:
- If you’d like to get all of my recommendations, and start profiting from picks like Pepsi, you can do so for as little as 12 cents per day. Just click here or give us a call at 1-800-291-8545.
- Not quite ready to pull the trigger? Then at least consider investing in an exchange traded fund like the Vanguard Consumer Staples ETF (NYSEARCA:VDC). It owns a sampling of multinational food companies and household product makers, and it features a rock-bottom expense ratio of just 0.14 percent.
Man, I’m thirsty now — for more than investment profits. I think I’m going to go grab a diet soda!
Until next time,
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaMare based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Andrea Baumwald, John Burke, Marci Campbell, Selene Ceballo, Amber Dakar, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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