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