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A Stock Market Food Fight



February 22, 2011 – Comments (3) | RELATED TICKERS: SYY , MKC

It's tough to think of companies that are more dominant in their corner of the market than Sysco (SYY) and McCormick (MKC).  Sysco's investor fact sheet states that it's the "only major public foodservice distribution company in the U.S." For McCormick, how many can name the next largest spice producer?

That market dominance should give these two companies an edge in passing price increases on to their customers.  In this food fight, the two squared off.  Both will keep their green thumbs on my CAPS scorecard, but I'm planning a real-life portfolio shift in a few days.

Did I pick the right winner?

Fool on!


3 Comments – Post Your Own

#1) On February 23, 2011 at 1:50 AM, Valyooo (32.77) wrote:

I think you picked the wrong fight.  If food costs rise in aggregate, I don't think the consumer is going to be abandon any particular brands.  Pricing power is not that important here.  Plus, the soft commoditties went limit down...the margins may widen again.

SYY seems like a great brand just from working in food.  However, I don't know much about the company.

As far as food stocks in general, I want to look more into DPZ...the CEO is really trying to turn the company around.

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#2) On February 23, 2011 at 2:50 AM, awallejr (52.41) wrote:

Love MKC.  Spices work in any kind of market.  SYY who knows.  Margins might get squeezed with rising input costs.

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#3) On February 23, 2011 at 2:55 AM, ikkyu2 (98.55) wrote:

Holy cow, I had no idea MKC was publically traded.  THE SPICE MUST FLOW!!!

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