Published:
October 20, 2008
The
correct answer is 
(A.) Treehouse Foods (THS)
Despite the market turmoil,
Treehouse Foods hit a 52-week high
this year and is trading +26.9%
higher in 2008. The company makes
private-label foods like canned
soup, baby formula, salad dressings,
and sauces. The company also offers
niche consumer brands, including
cheaper, value-oriented brands and
products that incorporate natural
and organic foods.
The private label food industry is
growing faster than the food
business at large. One reason that
Treehouse is still climbing is
because demand for basic foods and
sauces are not particularly
sensitive to economic growth or
contraction. Even better, consumers
looking to save on grocery bills
might choose to reach for a
private-label brand rather than a
traditional brand name.
Research shows that companies
hitting new 52-week highs have a
tendency to outperform the broader
market over the ensuing 12 months.
Some of that is due to pure momentum
-- investors jumping on the up trend
in a stock to try and catch a piece
of the move. But there is also a
good fundamental reason for this.
Clearly, investors tend to buy
stocks when they believe a company's
fundamentals are strong and
improving. This is even truer during
weak markets.
With these points in mind,
StreetAuthority editor Paul Tracy
and his staff searched for companies
hitting new 52-week highs in the
midst of the current market carnage.
Only common-stock issuers with
market capitalization above $500
million, a closing price greater
than $10, and a new 52-week high in
the last 10 trading days were
considered. What they found was
astounding: companies hitting their
52-week highs came from a wide range
of industries, such as a regional
grocer up over +20% for the year, a
precious-metals company up over
+23%, and a utility up +19.6%.
Finding these rare gems can be
difficult, but Paul has done all the
work for you. In the latest issue of
his
Market Advisor newsletter,
he profiles these and other likely
outperformers.. To learn the names
of these stocks, and to learn more
about Market Advisor,
please visit this link.
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