We recently shared a list of the 10 Best Food Stocks To Buy Under $20. Today, let’s explore how Arcos Dorados Holdings Inc. (NYSE:ARCO) compares with these top food stocks.
The food industry is crucial for the global economy. As the world’s population grows, so does the demand for food. It’s estimated that the global food and beverages market reached $6.57 trillion in 2023 and is expected to grow by about 5.9% annually until 2028. Most of this growth is coming from the Asia-Pacific region.
Technology is changing how food companies operate. Innovations like robotics and artificial intelligence are enhancing efficiency and streamlining supply chains. Consumers are also shifting towards healthier food options that offer additional health benefits, such as weight management and heart health.
Despite a recent cooling in overall inflation, food prices continue to rise sharply—28% since 2019. A survey by RR Donnelley found that over 85% of consumers are frustrated with grocery prices, leading many to buy less to save money. Experts believe that once food prices go up, they rarely go back down.
“Inflation may go down, but food prices tend to remain high.”
Political factors and tariffs could continue to push food prices higher. For instance, issues like mass deportations could harm the workforce essential to the food supply chain, affecting prices and availability.
We identified 20 food stocks with prices under $20. From those, we picked the top 10 based on popularity among hedge funds, using data from Insider Monkey’s database as of Q3 2024.
Why follow hedge funds? Research suggests that mirroring their stock choices can lead to better market performance. Our strategy, which selects stocks every quarter, has seen strong returns.
Arcos Dorados Holdings Inc. operates over 2,140 McDonald’s restaurants in Latin America, focusing on Brazil and the Caribbean. The company is navigating challenges like currency fluctuations and changes in consumer spending. Inflation has also impacted costs for labor and raw materials.
Analysts see potential in Arcos Dorados. They point out that more than half of its restaurants are stand-alone units, which helps with sales through takeout, drive-thru, and delivery options.
Recently, Arcos Dorados renewed its franchise agreement with McDonald’s for another 20 years, consolidating its market position in the region.
“Arcos is undervalued…and has numerous growth opportunities.”
Arcos Dorados ranks 10th on our best food stocks list under $20. While it offers potential, some experts feel that stocks in the tech sector, particularly AI, might hold greater promise for quick gains. For an AI stock trading below five times its earnings, check out our report on the cheapest AI stock.
For more insights, check out our articles on the 20 Best AI Stocks To Buy Now and a Complete List of AI Companies Under $2 Billion.
Disclosure: None. This article was originally published by Insider Monkey.
Source link
Food Prices, ARCO, Food Industry, Business Research Company
