Alexia Howard of Sanford Bernstein has found a couple of food stocks that make sense today. even with inflation surging.  Food companies have been struggling with high commodity-cost inflation for the last 18 months,” she told CNBC.  However, “they’re not locking themselves into long-term price points; instead, they’re having much more frequent conferences with retailers.”

Alexia’s Recommendations:

At the top of her list is Sara Lee:

a. It’s a combination of very strong price increases that we’ve been seeing in the market data, plus strong productivity improvements.

b. Sara Lee reduced its head count at the corporate center by 300 people at the end of the last quarter.

She also likes Kraft Foods:

a. The year-on-year inflation in cheese has basically come down to zero…and that should really start to help Kraft’s margins

Dean Foods (DF)

Track Alexia’s picks at:

http://www.trackthepros.com/categories.php?category_id=892

Track other Sanford Bernstein picks at:

http://www.trackthepros.com/categories.php?category_id=518