Mead Johnson Nutrition (MJN):Invest in baby formula

Mead Johnson Nutrition CO (Public, NYSE:MJN) was the first IPO of 2009, which debuted under the radar in February.

For those of you who have kids, you know how expensive Baby Formula is.

Mead Johnson Nutrition Company manufactures, distributes, and sells infant formulas and other nutritional products. The company's products include routine and specialty infant formulas, children's milks and milk modifiers, pediatric vitamins, dietary supplements for pregnant and breastfeeding mothers, and products for metabolic disorders. It offers its products in North America, Europe, Asia, and Latin America. The company was founded in 1905 and is headquartered in Evansville, Indiana.

A week's supply of Enfamil will cost you between $20 - $30 depending on where you buy. Ever wonder why this powdered formula is so expensive? As it turns out, Mead Johnson's gross margins on these products are a whopping 62.5%!

Fellow Stockmasters, baby formula is completely recession-proof. America's babies need to eat (not to mention Europe, Asia, and Latin America's babies), and this is an expense that cannot be avoided by consumers.

Mead Johnson knows this, which is why they rip you off with their 62% profit margin.

It's time to get some of that money back by adding MJN to your portfolio.

Citigroup recently initiated Mead Johnson with a Buy rating and $32 target. The firm believes developing markets represent a significant opportunity for the company. Shares are currently trading at $27.88.