We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Conagra (CAG) Declares Sale of Wesson Brand to J.M. Smucker
Read MoreHide Full Article
Premium processed & packaged goods company, Conagra Brands, Inc. (CAG - Free Report) , announced that it would soon divest its Wesson oil brand to The J. M. Smucker Company (J. M. Smucker) (SJM - Free Report) – owner of Folgers Coffee brand. The move is in sync with Conagra’s ongoing portfolio restructuring strategy.
Inside Story
Conagra plans to spin-off its Wesson brand to J. M. Smucker for an estimated amount of $285 million. However, the company would continue to manufacture products under the brand for one year following the closure of the deal. Post divestiture, the manufacturing activities of the brand would be conducted in J. M. Smucker’s Cincinnati, OH facility.
J. M. Smucker is a renowned marketer and manufacturer of consumer food and beverage products, and pet food and pet snacks in North America. The company noted that the Wesson buyout would complement its Crisco oil brand. J. M. Smucker estimates to accrue annualized cost synergies worth $20 million by the end of two years of the Wesson buyout deal. Notably, the move is anticipated to bolster the company’s annual sales by approximately $230 million, moving ahead.
Portfolio Reshaping Strategy
Wesson brand divestiture is in sync with Conagra’s portfolio reshaping strategy, on the back of which, it intends to become a high performing consumer branded company. Over the last few quarters, Conagra has been selling off its loss-making business arms and trying to buy brands offering high margin growth.
For instance, Conagra completed the divestiture of its Lamb Weston business to Treehouse Foods, Inc. (THS - Free Report) (Nov 2016) to attain high commercial flexibility. Furthermore, the strategic buyouts (Apr 2017) of the fast-growing meat snack brand, Duke’s (owned by Thanasi Foods LLC) and premium seed snacks making brand, BIGS (owned by BIGS LLC), are likely to bolster the company’s revenues in the quarters ahead.
Why a Poor Zacks Rank?
Over the last one month, Conagra’s shares yielded a return of 0.60%, underperforming 3.31% growth recorded by the Zacks categorized Food - Miscellaneous industry. This Zacks Rank #4 (Sell) stock reported weaker-than-expected revenues for third-quarter fiscal 2017 on Mar 23.
Top-line performance was affected by the company’s ongoing portfolio management activities and adverse foreign exchange impact. We believe that Conagra’s results might be hurt by its current revenue base management activities, over the next few quarters. Additionally, other headwinds such as a stronger U.S. dollar, stiff industry rivalry or input price inflation are expected to weigh over near-term results.
Stocks to Consider
A better-ranked stock in the industry is Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) . The company pulled off an average positive earnings surprise of 16.80% over the trailing four quarters and currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Conagra (CAG) Declares Sale of Wesson Brand to J.M. Smucker
Premium processed & packaged goods company, Conagra Brands, Inc. (CAG - Free Report) , announced that it would soon divest its Wesson oil brand to The J. M. Smucker Company (J. M. Smucker) (SJM - Free Report) – owner of Folgers Coffee brand. The move is in sync with Conagra’s ongoing portfolio restructuring strategy.
Inside Story
Conagra plans to spin-off its Wesson brand to J. M. Smucker for an estimated amount of $285 million. However, the company would continue to manufacture products under the brand for one year following the closure of the deal. Post divestiture, the manufacturing activities of the brand would be conducted in J. M. Smucker’s Cincinnati, OH facility.
J. M. Smucker is a renowned marketer and manufacturer of consumer food and beverage products, and pet food and pet snacks in North America. The company noted that the Wesson buyout would complement its Crisco oil brand. J. M. Smucker estimates to accrue annualized cost synergies worth $20 million by the end of two years of the Wesson buyout deal. Notably, the move is anticipated to bolster the company’s annual sales by approximately $230 million, moving ahead.
Portfolio Reshaping Strategy
Wesson brand divestiture is in sync with Conagra’s portfolio reshaping strategy, on the back of which, it intends to become a high performing consumer branded company. Over the last few quarters, Conagra has been selling off its loss-making business arms and trying to buy brands offering high margin growth.
For instance, Conagra completed the divestiture of its Lamb Weston business to Treehouse Foods, Inc. (THS - Free Report) (Nov 2016) to attain high commercial flexibility. Furthermore, the strategic buyouts (Apr 2017) of the fast-growing meat snack brand, Duke’s (owned by Thanasi Foods LLC) and premium seed snacks making brand, BIGS (owned by BIGS LLC), are likely to bolster the company’s revenues in the quarters ahead.
Why a Poor Zacks Rank?
Over the last one month, Conagra’s shares yielded a return of 0.60%, underperforming 3.31% growth recorded by the Zacks categorized Food - Miscellaneous industry. This Zacks Rank #4 (Sell) stock reported weaker-than-expected revenues for third-quarter fiscal 2017 on Mar 23.
Top-line performance was affected by the company’s ongoing portfolio management activities and adverse foreign exchange impact. We believe that Conagra’s results might be hurt by its current revenue base management activities, over the next few quarters. Additionally, other headwinds such as a stronger U.S. dollar, stiff industry rivalry or input price inflation are expected to weigh over near-term results.
Stocks to Consider
A better-ranked stock in the industry is Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) . The company pulled off an average positive earnings surprise of 16.80% over the trailing four quarters and currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>