Zacks Investment Ideas feature highlights: Darling International, Sygenta and Sociedad Quimica Minera

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Feb 07, 2011, 09:30 ET

CHICAGO, Feb. 7, 2011 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Darling International Inc (NYSE: DAR), Sygenta (NYSE: SYT) and Sociedad Quimica Minera (NYSE: SQM).

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3 Secret Stocks to Play Rising Food Prices

Are you noticing higher prices at the grocery store?

In January, world food prices were reported at new all time highs, after rising for 7 months in a row. The impact of rising food prices are being felt across the globe. Many people are tracing the recent political unrest in both Tunisia and Egypt back to rising food prices.

Suddenly "food inflation" is on everyone's lips.

In 2010, corn prices rose 52%, wheat jumped 47% and soybeans gained 34%.

There is no indication these gains are slowing in 2011. If anything, the recent weather disruptions from severe winter storms in America's heartland which has impacted the wheat crop, to Cyclone Yasi destroying some of the sugarcane and banana crops in Queensland Australia have put further pressure on food prices.

But outside of buying a farm, how can you play rising food prices?

Darling International Inc (NYSE: DAR) turns animal and food waste into other commercial products such as tallow, protein meal and yellow grease.

It also services the restaurant industry by offering used cooking oil recycling and grease trap services. Darling then transforms the used cooking oil and commercial bakery waste into feed and fuel ingredients that are sold to agriculture, chemical and bio-diesel manufacturers worldwide.

The company has been expanding. In December 2010, it completed the acquisition of Griffin Industries, one of the largest privately-held used cooking oil and bakery by-product recycling companies in the U.S., for $840 million in cash and stock.

Earnings are expected to grow 21% in 2010 and another 65% in 2011. This Zacks #1 Rank (strong buy) is also cheap, with a forward P/E of just 13.2.

Sygenta (NYSE: SYT) is a Swiss-based agribusiness company with the world's largest crop protection business and one of the largest seed businesses. Two-thirds of sales are to the Europe/Middle East and North American markets.

While earnings are expected to be flat year over year in 2010, this Zacks #2 Rank (buy) is expected to grow earnings by 17% in 2011.

It trades with a forward P/E of 17.9 which makes it a relative bargain compared to its competitors like Monsanto, which trades at 27x. Sygenta also pays a dividend, currently yielding 1.4%.

Sociedad Quimica Minera (NYSE: SQM) is a Chile-based fertilizer, iodine and industrial chemicals manufacturer. Its fertilizer division, which sells potassium and nitrate nitrogen, is its largest segment.

As fertilizer prices rise and demand increases, earnings are expected to grow by 16% in 2010 and another 40% in 2011.

But even with the growth, the stock doesn't come cheap. It's trading with a forward P/E of 27, among the most expensive of its peers.

This Zacks #2 Rank (buy) does reward shareholders, however, with a 1% dividend yield.

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