Pizza party! Papa John's is a hot stockAugust 1, 2012: 11:44 AM ET
Who doesn't like pizza? Whether it's hot out of the oven or cold leftovers from the fridge the morning after some late-night reveling, pizza is a go-to meal for many Americans. And that's been great news for Papa John's (PZZA). The company reported earnings that topped forecasts Wednesday morning, sparking a nice pop in the stock.
Traders on StockTwits debated the merits of Papa John's food (and stock) versus its key rival Domino's (DPZ). Investors also mused about whether pizza's popularity is a sign of a sluggish economy ... and if pizza prices may soon surge along with other food due to the terrible drought conditions in the Midwest.
I'll take your word for it. I live in Brooklyn. So there's no way I'm getting pies or slices from Papa John's, Domino's or Yum! Brands (YUM)-owned Pizza Hut!
Good points here. The strength of bargain retail king Wal-Mart (WMT) and cheaper fast-food chains -- along with other consumer staples stocks like king of beers Anheuser-Busch (BUD) and tobacco firm Reynolds American (RAI) -- may be evidence that the economy is still in pretty lousy shape. But investors can profit from a low, slow BBQ recovery. I wrote about that in my most recent Money magazine column.
Investors don't seem too worried about this right now. But perhaps they should be.
There are concerns that the price of beef, corn, poultry and milk will rise sharply due to the drought. That could hurt profit margins if companies are unable to raise prices enough to offset the higher expenses. But consumers may also pull back if prices get too high.