Packaged food makers have been among the ranks of leading performers lately. For example, candy maker Hershey's (HSY) looked pretty sweet in June. The shares rose 7.7% after the company said it had a five-year growth plan to expand market share for popular products such as Hershey's Kisses and Reese's peanut butter cups.
Since then, the stock has held its gains, a bullish sign, indicating that institutional holders remain confident about the stock. It barely budged in July, ending the month 0.4% lower. So far this month, the stock is flat.
On a daily chart, it's easy to see that Hershey's has been gliding along its five-day exponential average, ending Thursday's session exactly even with that line.
The weekly chart gives a slightly different perspective, indicating support above the 10-week moving average. The stock has been trading in an essentially sideways pattern since retreating from its July 10 high of $72.97. You can see the price swings more clearly on a daily arithmetic chart, but that is minimized on a weekly logarithmic chart.
The stock retreated to $70.06 on July 24. It found support above its 50-day moving average, and rebounded from there. For now, it's in a buy zone, holding just at its five-day average, and below its prior high.
Buyers have been on a feeding frenzy when it comes to B&G Foods (BGS), which makes Ortega taco shells and salsa, Cream of Wheat and Polaner fruit spreads, among other products.
The stock is working on its fourth month in a row of upside trade. On Thursday, it rallied to within pennies of its all-time high of $29.03, reached on Monday. It's extended from buy range at this juncture, but a pullback to the 15-day exponential average could offer a new entry opportunity.
The company has notched continuous earnings and revenue growth over the past couple of years, although growth rates have been somewhat erratic. For 2012, analysts expect income of $1.40 per share, up 27% over 2011. That growth rate is seen declining to 4% next year, to $1.49 a share.
Some of B&G's products could be considered healthy, but there are a growing number of food makers that specialize in natural and organic offerings.
One recent IPO that falls into the natural foods category is Annie's (BNNY). I typically track recent IPOs pretty closely, because they are often among the market's best price leaders. Fundamentally, new issues also tend to be standouts. That's because newly public companies have enthusiastic management teams, as well as products or services that are in demand. It's not unusual to see young companies with strong earnings gains spurred by revenue growth, along with good return on equity and cash flow per share.
Annie's, which went public at $19 in March, is trading at around $42. It's a bit extended from its five-day moving average, so I'd like to see a pullback to that price line, or even the 15-day line, as the next entry opportunity. The stock has some room to rally before hitting prior resistance between $44 and $45, but general market conditions will likely have an effect on this stock's -- and any stock's -- technical prospects.