Some food trades have flourished during an otherwise rough year for stocks, but “Fast Money” traders said Wednesday they would hesitate to jump into the sector.
Tyson Foods, Campbell Soup and Hormel Foods shares have climbed 22, 15 and 10 percent this year, respectively. In that span, the S&P 500has fallen more than 5 percent.
Some traders contended that those food stocks look too expensive at their current levels.
“It’s absurd the multiple you’re paying for that company,” trader Tim Seymour said of Tyson.
If he had to pick one of those names, trader Steve Grasso said he would choose Hormel because its rise has been steadier than both Tyson and Campbell. Trader Pete Najarian, meanwhile, said he would prefer Kraft Heinz over any of those stocks.
He believes the stock looks more appealing on valuation, as it is barely positive this year.
Trader Karen Finerman, meanwhile, argued that restaurant stocks could have some upside. She believes sustained lower gas prices will drive more consumer money to dining.
Tim Seymour is long AAPL, BAC, BBRY, DO, F, FCX, GM, GOOGL, INTC, JCP, NKE, SINA, T, TWTR, VZ, XOM. Tim’s firm is long BABA, BIDU, CLF, KO, MCD, PEP, SAVE, SBUX, VALE, WMT,YHOO, short HYG, IWM.
Long AAPL, BAC, BKE, BMY, DIS, DISCA, GE, KMI, KMI-A, KO, MRK, PEP, PFE, SAVE, VIAB, he is long calls AA, AAL, AMJ, BAC, BHP, DAL, DATA, GDX, HAIN, HBAN, HOT, IBM, LB, LC, NRF, SLV, TJX, UAL, USG, WMB, WYNN, ZIOP, he is long puts DB, EWH, MUR, RIG, VLO.
Steve is Long AAPL, AEO, BA, BAC, CC, DD, DIS, DECK, EVGN, KBH, MJNA, MU, OLN, PFE, PHM, T, TWTR, GDX firm is long CXO, OXY, BP, CVX, RIG kids own EFA, EFG, EWJ, IJR, SPY
Karen is long BAC, C, FL, GOOG, GOOGL, JPM, LYV, KORS, M, SEDG, SPY calls, URI, she is short SPY. Her firm is long ANTM, AAPL, BAC, C, C calls, FINL, FL, GOOG, GOOGL, JPM, KORS, LYV, M, MOH, NRF, PLCE, URI, her firm is short IWM, MDY, SPY. Karen Finerman is on the board of GrafTech International.