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Food
Stock Investment Highlights
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Company Summary Reports:
click here for a list of company summary reports that cover various food
stocks.
Company
Summary Reports:
( click on
report
title and date for the full report)
Food Industry Comment: June 15, 2006
Sara Lee (SLE-$17), Heinz (HNZ-$40),
Smucker (SJM-$40), Del Monte Foods (DLM-$11.30), SYSCO (SYY-$30):
After showing good gains in 2004,
the food stocks performed poorly on both an absolute and a relative
basis in 2005, with the S&P Packaged Foods index declining 10.5%,
while the S&P 500 rose 3.0%, as the food companies suffered from
inflationary pressures, and the broader index benefited from strong
trends in housing, energy and a number of other cyclical
industries. Those trends continued in January, but since then the
Foods have outperformed for four consecutive months, for the first
time since 2002. Despite the improved market performance for the
group overall recently, many of the stocks have yet to see much
recovery from their lows, and remain attractive buy ideas. The
comments below focus on five of our
“1”-rated
(Strong Buy) stocks that either have been in the news recently or
are particularly timely purchases.
Company
Summary Report: March 3, 2006
Sara Lee (SLE-$17.50), SYSCO
Corporation (SYY-$29.50), General Mills (GIS-$49), PepsiCo
(PEP-$59), Dean Foods (DF-$38):
These five companies, all of which are rated
“1”
(Strong Buy), were among the 28 food, beverage, tobacco and
household products companies that made presentations to an
audience of more than 500 analysts and money managers at last
week’s annual Consumer Analyst Group (CAGNY) conference in
Scottsdale, Arizona. The comments in this report summarize our
current investment views on each stock, based in part on their
discussions at the conference, as well as other recent contacts.
Food Industry Comment:
Year-End Overview: January 12, 2006
After outperforming the market in 2004,
the food stocks as a group did poorly in 2005, due primarily to
disappointing earnings caused by inflationary cost pressures,
problems in some overseas operations, the strengthening of the
dollar, restructuring steps at several companies, and the initial
impact of expensing stock options. The nine leading packaged-foods
issues showed an average decline of 9%. The only gainer for the
year was PepsiCo, up
13%, while Campbell Soup,
General Mills, and
Hershey were all
essentially unchanged in price. On the other hand,
ConAgra Foods,
Sara Lee,
Kraft
Foods and
Heinz suffered
substantial declines of 31%, 22%, 21%, and 14%, respectively. In
the foodservice sector,
Performance Food
Group gained 5%, after
a sharp decline in 2004, but
SYSCO, the industry leader, saw its price drop 19%.
Among the small-to-midcap companies at the bottom of the table,
Dean Foods had a stellar
year, up 39%, as did Flowers
Foods, gaining 31%, but
Sensient Technologies
dropped 25%, while Del Monte
Foods and Smucker
fell 5%-7%. TreeHouse Foods,
which became a public company in June, by the end of the year was
trading 44% below its high due to weak earnings.
Food Industry Comment: September 29, 2005
Campbell Soup (CPB-$29.50),ConAgra Foods (CAG-$24.30),Del Monte
Foods (DLM-$10.70), General Mills (GIS-$47.40), Heinz (HNZ-$36.60),
Smucker (SJM-$48.30) For
nearly two years, food companies have been pressured by inflationary
cost increases for agricultural ingredients and for energy-related
inputs such as fuel for their plants, packaging materials, and
transportation. They have responded with selective price increases
and with cost-reduction steps. Nevertheless, profit margins
have narrowed, and both earnings and stock market performances have
been disappointing.
However, we see increasing signs that the worst may
be over, even though oil prices remain above expectations. As
evidence of an improving outlook, we cite the fact that of the six
food companies listed above, all of which reported quarterly
earnings in the past four weeks, four (DLM, CPB, CAG and GIS)
beat expectations, and their shares rallied 4%-7% on the news.
Company
Summary Report, March 4, 2005
ConAgra Foods (CAG-$28), Del Monte Foods (DLM-$11),
General Mills (GIS-$52), PepsiCo (PEP-$54), Sara Lee (SLE-$22.50),
J.M. Smucker (SJM-$51):
These
six companies, all of which are on our recommended list, were
among the 29 food, beverage, tobacco and household products
companies that made presentations last week at the annual Consumer
Analyst Group (CAGNY) conference in Scottsdale, Arizona. The
comments below summarize our current investment views on each
stock, based in part on their discussions at the conference, as
well as other recent contacts.
Food
Stock Summary, January 21, 2005
A number of our “1”-rated (Strong Buy) food stocks have come to life recently, in contrast to the generally weak market.
ConAgra Foods (CAG-$30), General Mills (GIS-$52) and
Sara Lee (SLE-$24.50) have been reaching new 12-month highs on an almost daily basis. These three stocks now show an average rise of 18% from their lows of last summer and fall, and GIS in particular is within $0.50 of its all-time high, reached in December, 2001, in the euphoria following the Pillsbury merger. Among our other recommended stocks,
PepsiCo (PEP-$53.50) and Del Monte Foods (DLM-$11.60), while still slightly below last year’s highs, are also well off their lows, and are performing well, as is
Dean Foods (DF-$34).
Food
Industry Comment: Year-End Overview- December 14, 2004
The food stocks in general have performed well during 2004,
and especially in the fourth quarter, when the nine leading
packaged-foods issues have shown average appreciation of 7%, and
the 16 stocks in our overall food universe have risen an average
of 8%, exceeding the 7% advance for the S&P 500 (Table 1).
Among the large brand-name companies, Hershey Foods has led
the way in 4Q, with an 18% gain, while Campbell Soup and Kraft
Foods are up 13% and 10%, respectively. In the foodservice
sector, SYSCO has gained 20%, and Performance Food Group
13%, both representing a recovery from depressed prices earlier. Flowers
Foods is up 16% to a new all-time high, on better than
expected earnings. The only food stock that is down for the
quarter is Del Monte Foods, with a 3% decline on reduced
earnings guidance by management...(more)
Company
Summary- Recommended Stocks- June 4, 2004
J.M. Smucker
(SJM - $49), Del Monte Foods (DLM - $10.50), General
Mills (GIS -$46), ConAgra Foods (CAG - $28) - These
four companies, all of which are on our Recommended List, will be
reporting results for their April/May fiscal years within a few
weeks. In each case, we expect F4Q earnings to meet or exceed
expectations, and we are bullish on the companies' prospects for
F2005. For DLM, GIS, and CAG, F4Q results will include the benefit
of an extra 14th week, which adds a theoretical 7.7% to
reported EPS. In our comments below, we discuss F4Q earnings both
with and without the additional week... (more)
Company
Summary- Recommended Stocks- May 18, 2004
Many of the food companies have faced challenging business
conditions over the past several quarters. The improving economy
has been a plus, as have favorable exchange rates, but significant
price inflation across a broad range of agricultural commodities,
as well as packaging materials and energy, has increased their
costs and put pressure on their margins. . . (more)
Despite these difficulties, 12 of the 16 food
companies we follow, including seven of the nine leading
packaged-foods marketers, reported increased earnings per share
for their most recent quarters. Six achieved double-digit growth,
namely Kellogg (+33%), PepsiCo (+15%), Hershey
Foods (+12%) among the brand-name leaders, SYSCO (+15%)
in foodservice distribution, and Flowers Foods (+75%) and Smucker
(+12%) in the mid-cap category. Sara Lee, Dean Foods
and Del Monte Foods showed 7%-8% gains. Only four
companies, Kraft (-9%), General Mills (-4%), Performance
Food Group (-54%), and Sensient Technologies (-20%),
earned less than in their prior-year periods.
Food
Stock Summary Table (dated May 18, 2004).
Company
Summary- Recommended Stocks- February 27, 2004
Sara Lee (SLE - $22), General Mills (GIS - $46), and Dean
Foods (DF - $36) - The managements of these three companies,
which are on our Recommended List, gave presentations at the
annual Consumer Analyst Group of New York (CAGNY) conference
last week in Scottsdale. The comments below summarize our current
investment views on each stock, based in part on their discussions
at the conference, as well as other recent contacts.
Food
Stock Summary Table (dated February 27, 2004).
INDIVIDUAL STOCK REPORTS:
Conagra
Foods (CAG)
April 3, 2008
January 7, 2008
September 26, 2007
July 17, 2007
March 28, 2007
January 9, 2007
October 19, 2006
March 21, 2006
January 23, 2006
December 13, 2005
September
14, 2005
July 8, 2005
May 20, 2005
December 31, 2004
July 2, 2004
March 26, 2004
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DEAN FOODS (DF)
October 1, 2007
May 10, 2007
February 12, 2007
August 3, 2006
March 3, 2006
May 18, 2005
February 1, 2005
November 09, 2004
September 10, 2004
August 6, 2004
May 7, 2004
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DEL MONTE FOODS (DLM)
March 4, 2008
December 19, 2007
September 5, 2007
March 19, 2007
December 7, 2006
September 15, 2006
July 26, 2006
March 30, 2006
December 7, 2005
July 20, 2005
December 3, 2004
September 14, 2004
July 2, 2004
March 9, 2004
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General
Mills (GIS)
January 14, 2008
October 8, 2007
March 30, 2007
January 26, 2007
September 27, 2006
July 7, 2006
April 6, 2006
March 3, 2006
January 19, 2006
June 30, 2005
December 28, 2004
October 8, 2004
March 19,2004
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H.J.
Heinz (HNZ)
April 15, 2008
December 4, 2007
September 17, 2007
June 7, 2007
December 1, 2006
November 29, 2005
September
22, 2005
June 2, 2005
November 30, 2004
May 25, 2004
March 5, 2004
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HERSHEY
(HSY)
Report Date
<back to top>
KELLOGG
(K)
Report Date
<back to top>
KRAFT
FOODS (KFT)
February 7, 2008
November 7, 2007
August 3, 2007
May 11, 2007
March 7, 2007
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PepsiCo
(PEP)
March 14, 2008
October 16, 2007
July 26, 2007
May 2, 2007
February 15, 2007
October 26, 2006
July 19, 2006
May 3, 2006
March 3, 2006
October 5, 2005
July 21, 2005
February 9, 2005
October 1, 2004
July 16, 2004
April 23, 2004
February 6, 2004
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Performance
Food Group (PFGC)
November 13, 2007
May 16, 2007
March 21, 2007
December 27, 2006
August 17, 2006
June 1, 2006
February 10, 2006
August 8, 2005
May 26, 2005
March 31, 2005
November 12, 2004
September 28, 2004
September 7, 2004
August 3, 2004
June 25, 2004
May 7, 2004
March 9, 2004
February 02, 2004
January 23, 2004
January 9, 2004
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Sara
Lee (SLE)
May 16, 2006
March 3, 2006
February 8,
2006
November 10, 2005
March 17, 2005
February 14, 2005
January 28, 2005
October 29, 2004
October 8, 2004
August 20, 2004
April 27, 2004
January 23, 2004
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Sensient
Technologies (sXT)
October 21, 2005
July 29, 2005
October 22, 2004
July 20, 2004
April 20, 2004
March 5, 2004
<back to top>
Sysco
Corporation (syy)
April 29, 2008
January 31, 2008
November 9, 2007
May 8, 2007
January 31, 2007
October 30, 2006
August, 17, 2006
July 27, 2006
May 4, 2006
March 24, 2006
March 3, 2006
February 1, 2006
November 4, 2005
October 12, 2005
August 18, 2005
May 12, 2005
March 24, 2005
February 4, 2005
November 5, 2004
August 20, 2004
April 30, 2004
March 26, 2004
January 27, 2004
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J.M. SMUCKER (SJM)
March 10, 2008
October 26, 2007
July 19, 2007
April 16, 2007
November 21, 2006
June 21, 2006
April 26, 2006
November
22, 2005
August 25, 2005
January 14, 2005
November 23, 2004
July 27, 2004
June 25, 2004
April 16, 2004
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TreeHouse
Foods (ths)
March 25, 2008
January 23, 2008
November 29, 2007
August 9, 2007
May 23, 2007
May 23, 2006
November 30, 2005
September 1, 2005
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<BACK
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Any
opinions made in this report are those of the individual making
them and may or may not be those of Shields & Company. Shields
& Company, its affiliates and subsidiaries and/or their employees
may from time to time acquire, hold or sell a position in the securities
mentioned herein. While this report has been prepared from original
sources and data we believe reliable, we make no representations
as to its accuracy or completeness, and our opinion is subject to
change without notice. Additional information is available upon
request.
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