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John Reese is CEO of Validea.com and Validea Capital, and portfolio manager for the Omega Consensus funds. Globe Investor has a distribution agreement with Validea.ca, a premium Canadian stock screen service. Try it.

Since the Great Recession, pundits and policy-makers alike have talked at great length about the United States' meagre inflation rate. Sub-2-per-cent "core inflation" has often been cited as a reason for the Federal Reserve to continue its quantitative easing policies, and as justification for higher equity valuations. In Canada, inflation has also been quite tepid.

For most consumers, however, it's another story. That's because declining prices have generally affected items that we might only buy once every few years – electronics; household items such as clocks and lamps; kitchen goods such as dishes and flatware, according to U.S. Labour Department statistics.

On the other hand, the price of the one thing that everyone uses every day – food – has jumped. Since bottoming in 2009, the United Nations' food price index has risen more than 30 per cent. Extreme weather, which has affected crop yields, and rising demand fuelled by population growth are two big reasons.

Neither of those two factors is likely to disappear any time soon, according to top strategist Jeremy Grantham of GMO. He has written extensively about the impact that climate change and population growth have had on the global food supply.

Mr. Grantham, one of the only strategists to call both the tech crash of the early 2000s and the housing bubble of the mid-2000s, has said that dwindling supplies of fertilizers such as potash are also having a big impact on the food industry, and he has warned that shortages may be on the horizon.

In such an environment, many companies that process and sell food have been growing earnings at a strong pace. Many are still trading at pretty attractive valuations.

In fact, food processors and food stores are both among the highest-rated industries on my Validea Canada Industry Index right now, and a number of U.S. food companies also rate highly.

Here's a trio of food stocks that my Guru Strategies, which are based on the approaches of Warren Buffett and several of history's other great investors, are keen on right now.

If food prices continue to rise, stocks such as these should provide a sort of inflation hedge. As always, however, you should invest in stocks like these as part of a broader, well-diversified portfolio.

Lassonde Industries Inc.

Based in Quebec, Lassonde mainly sells fruit juices and fruit beverages. The company, which has a market capitalization of $760-million, has taken in more than $1-billion in sales in the past year.

It trades at low volume, so it may be subject to significant volatility, but the model I base on the writings of James O'Shaughnessy thinks it's worth a long look. That model likes that Lassonde has increased earnings per share in each of the past five years and that its shares trade for just 0.73 times sales.

Metro Inc.

The company (market cap $5.9-billion) operates a network of more than 600 food stores in Quebec and Ontario, as well as more than 250 drugstores. It's one of my highest-rated stocks in Canada, getting strong interest from three of my models. The strategy I base on the writings of mutual fund legend Peter Lynch likes its 24.7-per-cent long-term earnings-per-share growth rate (using an average of the three-, four-, and five-year rates). Mr. Lynch famously used the P/E-to-growth ratio to find bargain-priced growth stocks, and when we divide Metro's 14.7 price-earnings ratio by that long-term growth rate, we get a PEG of 0.60.

The strategy based on the writings of hedge fund guru Joel Greenblatt, meanwhile, likes Metro's 9.2-per-cent earnings yield and 43-per-cent return on capital. And my O'Shaughnessy-based model likes that the firm has increased EPS in each of the last five years, and trades for just 0.51 times sales.

United Natural Foods Inc.

This Rhode Island-based firm is the largest publicly traded wholesale distributor to the natural, organic and specialty food industry in the United States and Canada. Retailers that it supplies include conventional supermarket chains, natural product superstores and independent retail operators.

United is another favourite of my O'Shaughnessy growth model. A few big reasons: The company has increased EPS in each of the past five years, its shares trade for just 0.52 times sales, and it has good momentum, with a 12-month relative strength of 73.

Disclosure: The author is long UNFI.

Editor's Note: An earlier online version of this article incorrectly stated Lassonde's sales number. This version has been corrected.

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