The New Age of Food ... Eating and Investing! | Uncommon Wisdom ...

I have to give you fair warning: Reading this letter may make you hungry.

We all have to eat somewhere. Not so long ago, Mrs. Cleaver and Aunt Bee had supper on the table every night. Kids cleaned their plates or else they didn?t get dessert.

Those days are long gone, but we still have to eat. Mom and Dad both have other jobs. So what happens? Supper is outsourced. Even if people don?t eat at a restaurant, they get take-out food from one.

Today?s ?home-cooked? meals are often pre-packaged concoctions that would give Aunt Bee a heart attack. For better or worse, this is how we eat in 2013.

Food is a big business ? and a tough one. The odds of success are very low. However, when someone finds the winning formula, new customers find them.

***

The latest and greatest restaurant stock is Noodles & Co. (NDLS). If you haven?t seen one yet, you will soon. They now have locations in 26 states.

Noodles? stock more than doubled on its first day of trading last month. Wall Street priced the June 28 Initial Public Offering at $18. A few hours later, they closed the session at $36.75. By July 2, the shares were above $47. Today they ended at a still-impressive $41.14.

We usually don?t think about restaurants as ?innovative,? but Noodles is a good example. They took an old favorite like macaroni and cheese, gave it a twist and added new features. Then they developed an efficient production system, designed an attractive package, and opened their doors to a hungry public.

This doesn?t mean Noodles? stock is a good buy at the current price, of course. I?m not recommending you buy NDLS ? but I think this business may just be on the right track.

***

The investing public is hungry for more than Noodles. Our all-knowing Bloomberg terminal tells me restaurant stocks are hot. Just look at these names from the all-time highs list.

• Cheesecake Factory (CAKE)

These are familiar names to most Americans. You may not recognize BLMN but you know its brands. The company runs Outback Steakhouse, Carrabba?s Italian Grille, Bonefish Grill, Fleming?s Prime Steakhouse and Roy?s.

Like you, I have many local favorites ? but I often find myself eating at national chains like these. They?re convenient, consistent and usually offer something for everyone at the table.

As I said above, the restaurant business is ruthless. The winners tend to expand quickly. A ?survival of the fittest? process ensures we are never far away from a familiar name.

When we?re hungry, we want our old favorites. Chain restaurants are the modern version of Aunt Bee?s kitchen. We know what to expect and we know we won?t leave the table hungry.

***

Restaurants haven?t completely replaced grocery stores. We still want a full pantry at home.

Supermarkets have changed, though. Wal-Mart (WMT) is well on its way to capturing the price-driven grocery shoppers. The local mom-and-pop grocers are gone.

Consumers who want quality as well as value go places like Whole Foods Market (WFM). Whether you are on a special diet or want to cook like a gourmet, WFM probably has what you need.

High-end grocery stores are also turning into a kind of restaurant. Many have huge salad bars and well-stocked delis. You can dash in, assemble your perfect meal, and zip home for a shockingly low price.

You can get a hot meal ? with just the right amount of just the foods you want ? for less than it costs to cook at home. Better yet, you don?t have to clean the dishes!

***

As wonderful as all this may be, it has a downside. Families need regular time together. We used to find it in the kitchen and around the dinner table. We need a new tradition.

Personally I rush home each evening after we send out this e-mail; my editor and I don?t usually get home until well after 7 p.m. I often get home just in time to play with my 1-year-old son for 15 minutes before getting him fed and into the bathtub and finally to bed.

My wonderful wife has dinner ready when I arrive, and she cooks food that she buys from a small health-food chain that I consider to be a cross between Whole Foods and Trader Joe?s called The Fresh Market. We also buy food from a local chain that we love and have shopped our whole lives at a grocery chain called Publix. (Fantastic customer service.)

On the weekends we eat out for a few meals, selecting healthy options from restaurant chains like the ones mentioned above and sometimes a few local restaurants that source organic food from local farms. Our eating habits are light-years away from how my wife and I ate just a few short years ago. Having a son completely changed our outlook on life.

Our research team has been following the progression of how folks? eating habits have also been changing recently as well. And even though investment research is a serious business, it allows us to have fun while learning about the right types of fuels (including stocks) that can make us healthier ? and wealthier!

What?s dinnertime like in your family? Tell me your story. I?d like to share it with our other readers, if you don?t mind.

***

Here is some other news I saw today ?

• While we?re talking about groceries, a hot summer is scorching much of the U.S. grain crop. Corn and wheat prices both jumped about 2% today.

• The Fed-induced stock swoon may have run its course, at least for now. The S&P 500 closed at 1,652.32 today, right where it was before Ben Bernanke?s June 19 news conference.

• Bond investors aren?t so lucky. Treasury yields are still rising. The 10-year yield stands at 2.63% as of today. On May 2, it was 1.63%. A full percentage-point-change in less than three months is huge ? and more may be coming.

Good luck and happy investing,

Brad Hoppman
Publisher
Uncommon Wisdom Daily

Brad Hoppman is the publisher of Uncommon Wisdom.

Source: http://www.uncommonwisdomdaily.com/the-new-age-of-food-eating-and-investing-16698

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