Back to top

Momentum

Conagra Foods, Inc. (CAG - Analyst Report) continues to trade strong, recently hitting a new all-time high as investors align their portfolios with food stocks on global over population. With a strong Q3 earnings surprise in hand and estimates on the rise, this Zacks #2 Rank stock is a solid food stock with some nice upward momentum.

Company Description

Conagra operates as a food company primarily in North America. The company operates in both finished food products and food product ingredients. Conagra was founded in 1919 and has a market cap of $9 billion.

Conagra began rallying in early October with the market, but shares got an extra boost on Dec 20 when the company reported strong Q3 results that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 9% from last year to $3.4 billion. Earnings also came in strong at 47 cents, 12% ahead of the Zacks Consensus Estimate.

The company's largest segment, Consumer Foods, saw sales increase 4% to $2.18 billion. It's other segment, Commercial Foods, comprising 37% of its revenue for the year, saw sales increase 16% from last year.

Financial Profile

Conagra has used its earnings momentum to strengthen its financial profile, with cash and short-term investments up $161 million from last year to $707 million while its total debt fell $350 million to $2.89 billion.

Estimates

We saw a little movement in estimates off the good quarter, with the current year gaining 3 cents to $1.82. The next-year estimate is up 2 cents in the same time to $1.97, a solid 8% growth projection.

Valuation

With a PEG ratio of 1.88, CAG trades at a premium to the benchmark of 1 for value.

12-Month Chart

On the chart, shares have been trending higher for the last few months, recently hitting a new all-time high on the good quarter. Take a look below.

This Week's Momentum Zacks Rank Buy Stocks

Fastenal Co. (FAST) has cranked out some very big gains over the last few months, recently hitting a new all-time high after jumping more than 50% since September. With a high industry rank and bullish growth projection, this Zacks #1 Rank stock is on the fast track with momentum. Read Full Article.

Reynolds American, Inc. (RAI) has been trading like a high flyer for the last few months, hitting a number of new all-time highs as investors shift into more conservative segments of the market. With a high industry rank and estimates on the rise, this Zacks #1 Rank stock is burning up the charts. Read Full Article.

Generac Holdings, Inc. (GNRC) has been surging for the last three months, recently hitting a new all-time high after almost doubling since late September. With another strong quarter in hand and a bullish growth projection, this Zacks #1 Rank stock is an industrial take on momentum. Read Full Article.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%