Appetite may be increasing for food stocks

Eric Atkins,
December 23, 2008 at 7:22 PM EST

WHAT ARE WE LOOKING FOR ?

Oversold agriculture stocks. The sector rode the alt-fuel burn-what-you-eat craze of the past couple years. Chinese and Indian demand for meat and fertilizer also sent the sector soaring. But it was sideswiped by this year's crash in commodity stocks, which have fallen further and harder than others.

TODAY'S SCREEN

We will revisit a screen we ran in March that looked at the shares held in the Claymore Global Agriculture exchange-traded fund. The ETF, which trades under the cute ticker COW and tracks the MFC global agriculture index, has fallen by 33 per cent this year. In comparison, the S&P 500 and the S&P/TSX composite index have fallen by 41 per cent and 40 per cent, respectively. The 16 shares listed are ranked by expected share growth in next year. Topping the chart is Brazil's Perdigao, which raises and processes pigs and chickens.

WHAT DID WE FIND ?

Look at the second column. After a brutal year, many of the stocks listed have posted strong returns in the past month. This could be a sign momentum is on their side and a realization the food sector has been unfairly hit by the market crash and recession. (Are we eating less? No. And cheaper fuel is a blessing for farmers.) Given the beating most shares have taken, there could be some buying opportunities in agriculture.

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