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Forget SUPERVALU, Buy These 4 Consumer Staples Stocks
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The world economy seems to have recovered from the initial Brexit jolt, but uncertainties surrounding the Fed’s decision of a rate hike and other global issues still exist. Thus, it’s time to fine-tune your portfolio by disposing stocks that may hurt your returns. SUPERVALU Inc. is one such stock that is struggling to find a place in investors’ portfolio. Let’s find out why.
Why the Stock is Out of Favor Now
Shares of this grocery wholesaler and retailer have nosedived roughly 16% year-to-date and no near-term catalyst is in sight, which can help it regain the lost momentum. Moreover, the company currently carries a Zacks Rank #4 (Sell) and has been witnessing a downward revision in the estimates following its first-quarter fiscal 2017 results.. This clearly implies that analysts covering the stock are not convinced about SUPERVALU’s performance in the near future.
After witnessing a positive earnings surprise in the final quarter of fiscal 2016, SUPERVALU commenced fiscal 2017 on a sot note. The quarterly earnings per share of 19 cents missed the Zacks Consensus Estimate by 9.5% and plunged 17.4% from the year-ago period. . Sales also fell short of the consensus mark and declined 3.9% year over year. (Read: SUPERVALU Q1 Earnings and Sales Miss; Decline Y/Y)
Adverse foreign currency fluctuations and a deflationary environment have been weighing on SUPERVALU’s performance. The company’s sales have been declining since the past many quarters due to soft comparable sales. Though SUPERVALU is trying to keep its costs down, its selling and administrative expenses have been increasing relative to its revenues. Costs related to the potential separation of its Save-A-Lot business from the remainder of SUPERVALU's operating businesses are also adding to overhead expenses.
The company’s dismal results and other headwinds with which it is grappling with are well reflected from the downtrend in the estimates. The Zacks Consensus Estimate of 67 cents and 69 for fiscal 2017 and fiscal 2018 dropped 5.6% and 4.2%, respectively, over the past 60 days. Moreover, analysts polled by Zacks estimate second-quarter fiscal 2017 earnings to be 11 cents, down 1.6% year over year.
With SUPERVALU’s share price tumbling and estimates moving southward, it is wise to discard the stock, at least for the time being. Rather, you can shift your focus to better-ranked Consumer Staples stocks that are backed by positive estimate revisions, a a VGM Score of “A” or “B” and sturdy fundamentals.
4 Prominent Picks
You can count upon Springdale, AR-based meat processor Tyson Foods, Inc. (TSN - Free Report) , which flaunts a Zacks Rank #1 (Strong Buy) and a VGM Score of “A”. Tyson delivered an average positive earnings surprise of 12.2% over the trailing four quarters and has a long-term earnings growth rate of 11%. The stock has a witnessed a healthy run since the beginning of this year with a year-to-date return of 42.7%. It is expected to witness earnings growth of 43% in fiscal 2016 and 6.8% in fiscal 2017. The Zacks Consensus Estimate too has moved up over the past 30 days.
Another stock that should find a place in your portfolio is Sanderson Farms Inc.. Headquartered Laurel, MS, Sanderson Farms is one of the largest poultry producers in the U.S. It is engaged in the production, processing, marketing and distribution of fresh and frozen chicken products. The company has a VGM score of “A” and sports a Zacks Rank #1. The company delivered an average positive earnings surprise of 25% over the trailing four quarters. The Zacks Consensus Estimate too has increased over the past 60 days.
Another stock that should find a place in your portfolio is Omega Protein Corporation. . Headquartered Houston, Tx, Omega Protein is one of the largest producers of foods, dietary supplements, and animal feeds worldwide. The company has a VGM score of “B” and sports a Zacks Rank #1. The company delivered an average positive earnings surprise of 24% over the trailing four quarters. The Zacks Consensus Estimate too has increased over the past 30 days.
We also suggest investing in Sysco Corp. (SYY - Free Report) , which holds a Zacks Rank #2 (Buy) and has a VGM Score of “A” with a long-term earnings growth rate of 8.6%. The Houston, TX-based company delivered an average positive earnings surprise of 6.3% over the trailing four quarters. This food distributor stock is expected to witness earnings growth of 10.2% in fiscal 2017 and 12.4% in fiscal 2018. The Zacks Consensus Estimate too has increased over the past 30 days.
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>
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Forget SUPERVALU, Buy These 4 Consumer Staples Stocks
The world economy seems to have recovered from the initial Brexit jolt, but uncertainties surrounding the Fed’s decision of a rate hike and other global issues still exist. Thus, it’s time to fine-tune your portfolio by disposing stocks that may hurt your returns. SUPERVALU Inc. is one such stock that is struggling to find a place in investors’ portfolio. Let’s find out why.
Why the Stock is Out of Favor Now
Shares of this grocery wholesaler and retailer have nosedived roughly 16% year-to-date and no near-term catalyst is in sight, which can help it regain the lost momentum. Moreover, the company currently carries a Zacks Rank #4 (Sell) and has been witnessing a downward revision in the estimates following its first-quarter fiscal 2017 results.. This clearly implies that analysts covering the stock are not convinced about SUPERVALU’s performance in the near future.
After witnessing a positive earnings surprise in the final quarter of fiscal 2016, SUPERVALU commenced fiscal 2017 on a sot note. The quarterly earnings per share of 19 cents missed the Zacks Consensus Estimate by 9.5% and plunged 17.4% from the year-ago period. . Sales also fell short of the consensus mark and declined 3.9% year over year. (Read: SUPERVALU Q1 Earnings and Sales Miss; Decline Y/Y)
SUPERVALU INC Price, Consensus and EPS Surprise
SUPERVALU INC Price, Consensus and EPS Surprise | SUPERVALU INC Quote
Adverse foreign currency fluctuations and a deflationary environment have been weighing on SUPERVALU’s performance. The company’s sales have been declining since the past many quarters due to soft comparable sales. Though SUPERVALU is trying to keep its costs down, its selling and administrative expenses have been increasing relative to its revenues. Costs related to the potential separation of its Save-A-Lot business from the remainder of SUPERVALU's operating businesses are also adding to overhead expenses.
The company’s dismal results and other headwinds with which it is grappling with are well reflected from the downtrend in the estimates. The Zacks Consensus Estimate of 67 cents and 69 for fiscal 2017 and fiscal 2018 dropped 5.6% and 4.2%, respectively, over the past 60 days. Moreover, analysts polled by Zacks estimate second-quarter fiscal 2017 earnings to be 11 cents, down 1.6% year over year.
With SUPERVALU’s share price tumbling and estimates moving southward, it is wise to discard the stock, at least for the time being. Rather, you can shift your focus to better-ranked Consumer Staples stocks that are backed by positive estimate revisions, a a VGM Score of “A” or “B” and sturdy fundamentals.
4 Prominent Picks
You can count upon Springdale, AR-based meat processor Tyson Foods, Inc. (TSN - Free Report) , which flaunts a Zacks Rank #1 (Strong Buy) and a VGM Score of “A”. Tyson delivered an average positive earnings surprise of 12.2% over the trailing four quarters and has a long-term earnings growth rate of 11%. The stock has a witnessed a healthy run since the beginning of this year with a year-to-date return of 42.7%. It is expected to witness earnings growth of 43% in fiscal 2016 and 6.8% in fiscal 2017. The Zacks Consensus Estimate too has moved up over the past 30 days.
TYSON FOODS A Price, Consensus and EPS Surprise
TYSON FOODS A Price, Consensus and EPS Surprise | TYSON FOODS A Quote
Another stock that should find a place in your portfolio is Sanderson Farms Inc.. Headquartered Laurel, MS, Sanderson Farms is one of the largest poultry producers in the U.S. It is engaged in the production, processing, marketing and distribution of fresh and frozen chicken products. The company has a VGM score of “A” and sports a Zacks Rank #1. The company delivered an average positive earnings surprise of 25% over the trailing four quarters. The Zacks Consensus Estimate too has increased over the past 60 days.
SANDERSON FARMS Price, Consensus and EPS Surprise
SANDERSON FARMS Price, Consensus and EPS Surprise | SANDERSON FARMS Quote
Another stock that should find a place in your portfolio is Omega Protein Corporation. . Headquartered Houston, Tx, Omega Protein is one of the largest producers of foods, dietary supplements, and animal feeds worldwide. The company has a VGM score of “B” and sports a Zacks Rank #1. The company delivered an average positive earnings surprise of 24% over the trailing four quarters. The Zacks Consensus Estimate too has increased over the past 30 days.
OMEGA PROTEIN Price, Consensus and EPS Surprise
OMEGA PROTEIN Price, Consensus and EPS Surprise | OMEGA PROTEIN Quote
We also suggest investing in Sysco Corp. (SYY - Free Report) , which holds a Zacks Rank #2 (Buy) and has a VGM Score of “A” with a long-term earnings growth rate of 8.6%. The Houston, TX-based company delivered an average positive earnings surprise of 6.3% over the trailing four quarters. This food distributor stock is expected to witness earnings growth of 10.2% in fiscal 2017 and 12.4% in fiscal 2018. The Zacks Consensus Estimate too has increased over the past 30 days.
SYSCO CORP Price, Consensus and EPS Surprise
SYSCO CORP Price, Consensus and EPS Surprise | SYSCO CORP Quote
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>