Nestle (NSRGY)

Unlike other food companies, Nestle has proven its ability to grow revenues during tough times. Competitors such as Unilever have been forced to abandon their forecasts due to economic uncertainty and volatile commodity prices, but Nestle has repeatedly reaffirmed its 2009 guidance of 5% growth. As consumers cut back on eating out, they will trade down to lower priced prepared foods. As Nestle has a well diversified portfolio of products, this trend will benefit the company.

On August 26, 2010, pharmaceutical giant Novartis completed its purchase of Nestle's stake in eyecare company Alcon for $28 billion. Bought in 1977 for $280 million, the value of Nestle's investment has since multiplied more than 140 times. The recent influx of cash, and perhaps spurred by Kraft's takeover of Cadbury, has fueled rumors of Nestle's interest in buying new business.

Although there was speculation in early March 2010 of Nestle possibly buying out Lillian Bettencourt's share in L'oreal, there have been also been opposing rumors saying the opposite, that Nestle is planning to sell its stake in in the company to market investors.

Earlier in August 2010, a broker dealer raised the possibility of Nestle purchasing Hershey, saying "There’s a strong possibility that Nestle is interested in acquiring Hershey." H.J. Heinz Company has also been mentioned as a possible takeover candidate in the food industry.

With the $28 billion from the Alcon sale in hand, Nestle has enough money to purchase almost any publicly traded food company for cash. Nestle's interests haven't been limited to food, so it is also possible that the company is looking at expanding into other industries.