Back to top

Image: Bigstock

Zacks Investment Ideas feature highlights: CBOE Global Markets, ConAgra, SuperValu, United National Foods and Medifast

Read MoreHide Full Article

For Immediate Release

Chicago, IL – April 20, 2018 – Today, Zacks Investment Ideas feature highlights Features: CBOE Global Markets (CBOE - Free Report) , ConAgra (CAG - Free Report) , SuperValu , United National Foods Inc. (UNFI - Free Report) and Medifast (MED - Free Report) .

Hungry for Earnings Growth? Check These 4 Food Stocks

In an improving retail environment, much attention tends to get paid to the obvious subcategories, like Automobiles, Department stores and specialties like Apparel. Often overlooked is this industry sub-segment that produces products that everyone uses every single day – food.

After a wild ride in February and March, the broad markets seem to be settling back into a period of lower volatility and the slow grinding rally is back on.

In fact, history suggests that a spike in volatility, as measured by CBOE Global Markets VIX index, followed by a rapid slide signals that the broad markets have put in a short-term bottom. The VIX, sometimes referred to as the market’s “fear gauge,” measures how much traders are willing to pay for out of the money options.

During periods of relative calm, market news tends to focus on the more exciting stocks with interesting stories, but longer-term investors would be well-served to seek out steady performers with growing earnings estimates. Over the past 30 years, the Zacks Rank has proved that companies whose earnings estimates have been rising handily outperform the market.

Let’s take a look at four food stocks in different sections of the industry that fit the bill.

Selling the Brands Everyone Knows

ConAgra, manufactures and markets packaged food products, primarily for retail markets, but also restaurants and food service. Their brands include household names like Orville Redenbacher, Healthy Choice, Peter Pan and dozens of others. The company makes frequent acquisitions and divestitures to stay abreast of changing consumer preferences.

With margins hurt by increased food and transportation costs last year, ConAgra is poised to regain a positive earnings trajectory. The company recently raised it guidance for earnings in 2018 from $1.84-$1.89 to $2.03-$2.05. Analysts followed with 7 upgrades in the last 30 days, earning ConAgra our highest score, Zacks Rank #1 (Strong Buy).

Retail and Wholesale Food

SuperValu sells food items both to its wholesale customers nationwide and through 217 of its own traditional retail grocery stores. Also hurt recently by declining gross margins due to higher food and fuel costs, SuperValu plans to take care of earnings by expanding the higher margin wholesaling business.

Analysts expect SuperValu to increase its sales by 37% and 32% in the next two quarters, respectively. Growth estimates for 2018 average 20% vs 15% for the industry and 2018 earnings are expected to come in at $2.43/share, a 20% increase over $2.03 in 2017. SpuerValu is a Zacks Rack #1 (Strong Buy).

Because the stock has been beaten down over the last year, the forward P/E stands at just 6.2X, a true value opportunity.

Banking on a Trend Toward Healthy Choices

United National Foods Inc. is the largest distributor of natural, organic and specialty foods in the U.S. The popularity of these healthy alternatives in the retail market have helped United International beat the Zacks Consensus Earnings Estimate in each of the last four quarters by an average of 10%.

Nine analysts have raised their 2018 earnings estimates in the past 90 days (versus zero downgrades), bringing the Zacks Consensus Estimate to $3.09/share from $2.82/share, making United National Foods a Zacks Rank #1 (Strong Buy).

Helping Consumers Make Smart Choices

Finally, Medifast is a leading producer of healthy food choices and other products specifically for the weight loss and “healthy living” market. Recommended by over 20,000 doctors, it’s products are also sold through an independent network of coaches who combine nutritional advice with lifestyle changes to ensure customers’ success.

Thanks to rapidly increasing sales and a whopping 25% earnings beat last quarter, the stock is on a real tear this year, up 47% YTD. Medifast is also a Zacks Rank #1 (Strong Buy).

Follow us on Twitter:  https://twitter.com/ZacksResearch

Join us on Facebook:  https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com/performance

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.