In this article, we will be taking a look at 10 cheap food stocks to buy. To skip our detailed analysis of the food sector and to see more of these stocks, you can go directly to see the 5 Cheap Food Stocks to Buy.

The food and beverage industry is one that has long been considered an industry that can weather the worst storms. Even in times of recession, the industry perseveres, considering the fact that no matter how bad things get, consumers will always be looking to buy food. This steady demand has resulted in the food and beverage industry today being one of the largest industries in the world. In one of our previous articles, we mentioned that this industry was worth $2.3 trillion in 2021 and was expected to grow at a compound annual growth rate of 10.6% to reach a valuation of $5.1 trillion by 2029. According to a report by the Business Research Company published in January, the industry had grown to be worth $6.7 trillion in 2022 and $7.2 trillion by the start of 2023. This exceptional and consistent growth of the industry is had been aided by a range of factors, one of which is the increase in food prices.

Russo-Ukrainian Conflict and its Impact on the Food Industry

With the outbreak of the Russo-Ukrainian conflict, many industries were hit, resulting in product scarcity across many sectors and consequent price rises with supply being unable to meet demand. The same trend was observed in the food and beverage industry, where a huge increase in food prices was observed through 2022 and even heading into 2023. Russia and Ukraine are two of the world's largest exporters of wheat and other crops. According to a CNN article published in January, the start of the war drove the Food Price Index developed by the Food and Agriculture Organization of the United Nations to its highest annual level on records going back as far as 2005. The Index rose by over 14% in 2022 compared to 2021.

With the entry of these two countries into a second year of war, vulnerable countries are continuing to face heightened food insecurity as prices remain high even after dropping in March. According to the Food and Agriculture Organization of the United Nations, since March 2022, there have been 11 consistent price declines every month till March 23 when it comes to the food industry. As of this March, these price declines have brought food prices down 19% from their peak in March 2022.

A Positive Outlook Heading into 2023

Despite such price fluctuations and uncertainty in the market, food stocks such as Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and The Kraft Heinz Company (NASDAQ:KHC) have continued to retain their popularity in 2023. Companies operating in this industry also seem to have a positive outlook heading into 2023, according to a survey conducted by Marcum Accountants & Advisors in 2022. The survey showed that 71% of the respondents, who were executives at food manufacturers, restaurants, distributors, retailers, and agriculture producers, reported revenue growth for their businesses between 2021 and 2022. An additional 69% of the respondents projected revenues rising over the next 12 months, while 64% of respondents had a positive outlook for the industry over the next year.

Photo by Darla Hueske on Unsplash

Let's now take a look at 10 cheap food stocks to buy.

Our Methodology

To select food stocks for our list below, we first compiled a list of popular food stocks based on analyst and hedge fund sentiments. We then shortlisted these stocks to 10 based on analysts' expected upside potential for them. We got this data from TipRanks and ranked the stocks based on their upside potential, from the lowest to the highest number. For hedge fund sentiment, we referred to Insider Monkey's hedge fund data for the fourth quarter, when 943 hedge funds were tracked.

Cheap Food Stocks to Buy

10. Mondelez International, Inc. (NASDAQ:MDLZ)

Upside Potential as of April 1: 7.96%

Average Price Target as of April 1: $75.27

Number of Hedge Fund Holders: 46

Mondelez International, Inc. (NASDAQ:MDLZ) is a packaged foods and meats company based in Chicago, Illinois. It manufactures and sells snack food and beverage products globally.

On March 20, Deutsche Bank's Steve Powers reiterated a Buy rating on Mondelez International, Inc. (NASDAQ:MDLZ) shares, alongside a $73 price target.

Mondelez International, Inc. (NASDAQ:MDLZ) is a reliable dividend stock, which can be of interest to income investors since the company has raised its dividend for the past nine years. As of April 1, it has a dividend yield of 2.21%. Shares of Mondelez International, Inc. (NASDAQ:MDLZ) are also intrinsically undervalued today, with Wall Street analysts placing an average price target of $75.27 on them. The shares were trading at $69.72 on April 1, and this gives them an upside potential of 7.96%.

GLG Partners was the largest shareholder in Mondelez International, Inc. (NASDAQ:MDLZ) at the end of the fourth quarter, holding 3.5 million shares. In total, 46 hedge funds were long the stock, with a total stake value of $1.5 billion.

Mondelez International, Inc. (NASDAQ:MDLZ), like Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and The Kraft Heinz Company (NASDAQ:KHC), is a highly popular food stock with immense upside potential.

9. The Coca-Cola Company (NYSE:KO)

Upside Potential as of April 1: 9.91%

Average Price Target as of April 1: $68.18

Number of Hedge Fund Holders: 58

The Coca-Cola Company (NYSE:KO) is a consumer staples company based in Atlanta, Georgia. It offers beverages under various brands like Coca-Cola, Diet Coke, and Fanta.

Analysts at JPMorgan hold an Overweight rating on shares of The Coca-Cola Company (NYSE:KO) as of March 13.

The Coca-Cola Company (NYSE:KO) is another attractive dividend stock on our list, with a dividend yield of 2.97% as of April 1. The company has been raising its yield for the past 60 years, making its dividend highly reliable. Analysts have an average price target of $68.18 on The Coca-Cola Company (NYSE:KO) shares, with a high forecast of $74, and they rate the stock as a Strong Buy.

Out of the 943 hedge funds tracked by Insider Monkey in the fourth quarter, 58 hedge funds were long The Coca-Cola Company (NYSE:KO). Their total stake value was $28.8 billion.

8. The Kraft Heinz Company (NASDAQ:KHC)

Upside Potential as of April 1: 12.49%

Average Price Target as of April 1:$43.50

Number of Hedge Fund Holders: 39

The Kraft Heinz Company (NASDAQ:KHC) is a food company based in Pittsburgh, Pennsylvania. The company's products include condiments and sauces, cheese and dairy, meats, and more.

Analysts at Deutsche Bank hold a Buy rating on The Kraft Heinz Company (NASDAQ:KHC) shares as of March 20.

Today, The Kraft Heinz Company (NASDAQ:KHC) is the third-largest food manufacturer in North America. The company had a forward P/E ratio of 13.8 on March 19, which was well below its normal P/E ratio of 17.2. Analysts have placed an average price target of $43.50 on The Kraft Heinz Company (NASDAQ:KHC) shares, with a high forecast of $50.

Berkshire Hathaway was the largest shareholder in The Kraft Heinz Company (NASDAQ:KHC) at the end of the fourth quarter, holding 325 million shares. There were 39 hedge funds long the stock in total, with a total stake value of $13.9 billion.

7. Adecoagro S.A. (NYSE:AGRO)

Upside Potential as of April 1: 18.05%

Average Price Target as of April 1: $9.55

Number of Hedge Fund Holders: 7

Adecoagro S.A. (NYSE:AGRO) is an agro-industrial company based in Luxembourg. It engages in farming crops and other agricultural products such as sugar, wheat, and corn.

On February 15, Grupo Santander's Christian Audi upgraded shares of Adecoagro S.A. (NYSE:AGRO) from Neutral to Outperform.

The average price target placed on Adecoagro S.A. (NYSE:AGRO) shares is $9.55, with a high forecast of $13. The shares were trading at $8.09 on April 1, so the average price target gives them an upside potential of 18.05%. Adecoagro S.A. (NYSE:AGRO) also has a low P/E ratio of 5.63 and an EV/Revenue (TTM) ratio of 1.5, highlighting the intrinsic undervaluedness of the shares.

Our hedge fund data for the fourth quarter shows seven funds long Adecoagro S.A. (NYSE:AGRO), with a total stake value of $113 million.

6. Performance Food Group Company (NYSE:PFGC)

Upside Potential as of April 1: 21.58%

Average Price Target as of April 1: $73.36

Number of Hedge Fund Holders: 29

Performance Food Group Company (NYSE:PFGC) is a food distributing company based in Richmond, Virginia. The company offers frozen foods, groceries, candy, snacks, beverages, and more.

Mark Carden, an analyst at UBS, holds a Buy rating on Performance Food Group Company (NYSE:PFGC) shares as of February 9. The analyst also placed a price target of $76 on the shares.

In the second quarter of fiscal 2023, Performance Food Group Company (NYSE:PFGC) generated revenues of $13.9 billion, representing a year-over-year increase of about 8.3%. The company has an EV/Revenue (TTM) ratio of 0.27, meaning it is currently undervalued compared to its potential. Analysts have an average price target of $73.36 on the shares, with a high forecast of $78.

In total, 29 hedge funds were long Performance Food Group Company (NYSE:PFGC). Their total stake value was $524 million.

ClearBridge Investments, an investment management firm, mentioned Performance Food Group Company (NYSE:PFGC) in its fourth-quarter 2022 investor letter. Here's what the firm said:

Performance Food Group Company (NYSE:PFGC), like Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and The Kraft Heinz Company (NASDAQ:KHC), is an attractive food stock with elite hedge funds piling into it today.

Click to continue reading and see the 5 Cheap Food Stocks to Buy.

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Disclosure: None. 10 Cheap Food Stocks to Buy is originally published on Insider Monkey.