5 Stocks That Beat Inflation

Even though Mike Mack runs one of world’s biggest agricultural businesses, he readily admits he “doesn’t have a clue” when crop prices will rise again. The CEO of Syngenta, the Swiss seed and pesticide firm, tells SmartMoney he doesn’t really care when they will go back, either. As the world’s population grows, it will need to grow more food, so Mack figures farmers will buy more of Syngenta’s products no matter which way crop prices go.

Some investors, however, do care about crop prices because of their significant effect on Syngenta’s (SYT) stock. When crop prices rise, farmers are more willing to buy Syngenta’s higher-quality—and more profitable—products that can dramatically increase crop yields. From 2006 to 2008, when corn prices more than tripled, Syngenta’s profits and stock price more than doubled.

Syngenta still isn’t recession proof. Demand for basic grains in China and India has slowed as cash-strapped families have traded down from eating protein like pork, which takes a lot of grain to produce, to rice, which does not. But analysts believe that is likely a short-term phenomenon. The current economic setbacks are baked into the stock price, says Jim O’Leary, portfolio manager of the Touchstone International Growth fund, which owns the stock. He believes the stock could rise significantly over the next two years.