Which FTSE 250 food producer stock will serve up a sound investment?

Tate and Lyle and Greencore both dish up good opportunities for FTSE 250 investment in food producer stock due to consumer trends and market conditions.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

Tate and Lyle (LSE:TATE) is one of my FTSE 250 top picks from the food producer market.

My interest in investing in them has strengthened this week as the company has made the news, with the potential sale of its primary products division in order to concentrate on its food and beverage solutions.

In effect it’s moving away from sweeteners such as corn syrup, to more health-conscious ingredients that replace sugars.

It’s a move in line with shifting tastes, making the business more competitive, as the consumer is more aware of the dangers of too much sugar, such as type 2 diabetes.

This why its share price should remain a bullish FTSE 250 investment for now.

Its shares accelerated by c.6% soon after the news of the potential restructuring broke on April 26. Yet Tate and Lyle’s stock price has seen an impressive climb of c.30% over the past six months.

The group’s trading statement confirmed an 8% rise in revenue, for the three months up to December 31.

Additionally, a rise in profits up to the end of March for the year is expected, partly due to increased momentum in its food and beverage solutions.

Greencore another FTSE 250 opportunity

Convenience food producer Greencore (LSE:GNC) is another FTSE 250 investment I am keen on in this sector.

This is despite a predictably difficult year due to the pandemic, as the food-to-go market has declined due to lockdown.

Greencore has been hurt as it supplies its products, which range from salads to sushi, to convenience retailers such as coffee shops, and travel related outlets.

Its trading statement revealed that food-to-go business has decreased by 21.7%, for the 13 weeks up to Christmas Day last year.

However, the stock has climbed this year, after falling to 90p per share after the second lockdown began in November.

And this comes as no surprise, as the food-to-go market should grow again this year with lockdown easing.

Analysts Lumina Intelligence has forecast growth of c.32% during 2021, and that the UK food-to-go market will increase in value by £7.3 billion over the next three years.

It’s a market that should remain bullish, providing me with a timely investment – unless there are major setbacks to lockdown easing, such as a dangerous Covid-19 variant.

It’s not all cheer for food producers

One FTSE 250 investment I am less enthused about is in meat provider Cranswick (LSE: CWK), even though, due to increased home consumption, the company produced a resilient response to the pandemic.

Its share price has been very up and down over the past year. Looking ahead, even though meat processing is expected to expand, there are several patterns that are expected to slow down the growth of meat processing.

The pandemic has resulted in the closure of many high-street meat-serving outlets, with damage being caused to many businesses even if they still remain open.

Additionally the popularity of vegetarianism and vegan diets are a threat to sales of meat in the short and longer term.

In contrast, Tate and Lyle and Greencore focus on several markets that are set to develop, which makes them better options to dish up a sound FTSE 250 investment.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Taberner has no position in any of the shares mentioned. The Motley Fool UK has recommended Greencore. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A pastel colored growing graph with rising rocket.
Investing Articles

Here’s how long it’s taken £1k of Nvidia stock to turn into £10k today!

Our writer explains how money invested in Nvidia stock less than three years ago has grown in value over tenfold…

Read more »

Thoughtful man using his phone while riding on a train and looking through the window
US Stock

3 red flags I’m seeing right now for the S&P 500

Jon Smith points out some concerns he has with the S&P 500 at current levels and picks one stock he's…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

UK dividend shares are outperforming US tech stocks!

UK dividend shares aren’t just for passive income investors. Over the last 12 months, they’ve been outperforming their US tech…

Read more »

DIVIDEND YIELD text written on a notebook with chart
US Stock

Here’s how much passive income an investor could make with £2k in Meta stock

Jon Smith looks at Meta stock from a different angle to normal, considering it as an option for an investor's…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

1 of my top UK shares is up 15% in a day! Is it still a buy for me?

Celebrus shares are soaring after strong full-year results. At a P/E ratio below 13, is it one of the best…

Read more »

Close-up of children holding a planet at the beach
Investing Articles

£10,000 invested in Jet2 shares 2 years ago is now worth…

Jet2 shares have surged in recent months and finally appear to be pushing towards fair value. Dr James Fox shares…

Read more »

piggy bank, searching with binoculars
Investing Articles

This FTSE 100 blue-chip could rise 26% in 12 months, according to brokers

While this FTSE 100 dividend stock has put investors through the wringer in recent years, some analysts see brighter skies…

Read more »

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

A 3-step passive income strategy to target major wealth

Want to invest in the stock market to build up a passive income stream? There's no fiendlishly complex multi-step mystique…

Read more »