Eat your way rich with these 3 stocks

While famed investor Phillip Fisher didn’t coin the phrase ‘scuttlebutt’ — that honour goes to some ancient sailors — he was possibly the first investor to use the term to describe the process of gathering information in an attempt to maximise one’s knowledge about a business.

While many investors may choose to do most of their investing from behind a desk, Fisher was constantly on the road meeting with management teams, visiting factories, suppliers and competitors. For example, if Fisher was considering an investment in family restaurant chain McDonald’s (NYSE: MCD) not only would he likely eat a different McDonald’s meal at a dozen of their restaurants, he would have gone and done the same at Burger King too!

Over the years, food businesses, including restaurant chains and branded food manufacturers have proven to be sound investments. Of course plenty of restaurants and food manufacturers have gone to the wall as well! Investors looking for exposure to what can be profitable area for investment may wish to emulate Fisher’s ‘try before you buy’ scuttlebutt and take a closer look and have a taste of the following ASX-listed businesses.

KFC (Kentucky Fried Chicken) operator Collins Foods (ASX: CKF) has 122 outlets in Queensland. After a rocky start to its listed life in 2011, the company appears to have steadied itself with the share price climbing back towards its initial public offering price on the back of an improvement in store sales.

Domino’s Pizza (ASX: DMP) has been going from strength to strength as it continues to roll out stores both in Australia and New Zealand as well as in Europe. Domino’s focus is takeaway and delivery, not dine-in; this has allowed the company to keep rents to a minimum as less space is required without the need for a dining area. It also means you can do this piece of scuttlebutt at home on your sofa!

Retail Food Group (ASX: RFG) can provide investors with scuttlebutt for breakfast, lunch and tea. As the franchisor of Brumby’s Bakeries, Michel’s Patisserie, bb’s café, Esquires, Donut King, The Coffee Guy, Pizza Capers and Crust, they have all meals and snacks covered. With the share price well off its highs, now might be the time to start exploring RFG’s menu.

Foolish takeaway

Unfortunately investing isn’t as simple as buying a business because you like its product, however understanding and having knowledge of a good or service that a business supplies, can provide important insights for your analysis.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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