Shares in food producer Cranswick (LSE: CWK) have risen by 5% today after it announced the acquisition of CCL Holdings and its wholly owned subsidiary Crown Chicken for £40m.

Crown is an integrated poultry producer in East Anglia and it breeds, rears and processes fresh chicken for supply into a broad customer base across grocery, retail, food service, wholesale and manufacturing channels. Furthermore, Crown has a well invested and efficient milling operation that satisfies all of its own feed requirements.

Cranswick expects the acquisition to be modestly earnings enhancing in the current year and the deal builds on its successful acquisition of Benson Pork in October 2014. As such, it seems to be a positive step for the company that has been well-received by the market.

With Cranswick offering a highly defensive earnings profile, it appears to have considerable appeal given the uncertainty in the wider market at the present time. However, with its shares trading on a price-to-earnings (P/E) ratio of 20.7 and being expected to record earnings growth of just 5% this year and 6% next year, Cranswick appears to be fully valued.

Investor sentiment under pressure

It’s a similar story for fellow food-focused company Greggs (LSE: GRG). The high street baker is part way through a highly successful turnaround project, with it recovering well from a difficult period a number of years ago. However, with Greggs’ shares now trading on a P/E ratio of 18.3 and being forecast to post a fall in net profit of 5% this year, investor sentiment could come under a degree of pressure.

Certainly, there’s scope for Greggs to expand its product range yet further and to continue its programme of closing unprofitable stores in favour of new openings. And while good value and convenient food locations are a staple that should experience a relatively stable level of demand, Greggs is priced as a growth stock when its forecasts appear to be below those of even the wider market. Therefore, its shares could continue to fall following their 18% decline since the turn of the year.

Worth buying

Meanwhile, Tesco (LSE: TSCO) appears to be well-worth buying at the present time. Unlike Greggs and Cranswick, Tesco is expected to report rapidly rising earnings over the next couple of years, with its bottom line due to increase by 81% in the current financial year and by a further 32% in the next. And despite Tesco trading on a P/E ratio of 22.4, such a strong growth rate equates to a price-to-earnings-growth (PEG) ratio of only 0.7, which indicates that it offers growth at a very reasonable price.

Clearly, Tesco lacks the stability of Cranswick, but its valuation points to a much wider margin of safety than is the case for either of its food-focused peers. Furthermore, with Tesco’s turnaround plan still being in its relatively early stages, its profitability could continue to improve over a sustained period. This means that its shares look set to outperform Greggs and Cranswick and continue their 29% rise since the start of the year.

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Peter Stephens owns shares of Tesco. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.