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Archer Daniels' Expansion on Track, Acquires Caterina Foods

FDP OME ADM USFD

Trades from $3

Archer-Daniels-Midland Company (ADM - Free Report) recently announced the acquisition of Lake Bluff, IL-based Caterina Foods, which manufactures gluten-free and high-protein pastas. This comes in line with the company’s strategy to enhance its food processing capabilities as well as global footprint through strategic acquisitions and divestitures.

Caterina Foods, a toll processor for Archer Daniels’ Harvest Innovations Company, produces specialty pastas in various shapes and sizes made out of flours of lentils, peas, corn, quinoa, rice, along with other legumes and grains. Going forward, the buyout is likely to expand the company’s WILD Flavors and Specialty Ingredients segment.

Subsequent to the acquisition of a majority share in Harvest Innovations, the company has witnessed a rise in demand for gluten-free and other non-wheat pastas. Consequently, it believes that it will derive synergic benefits out of the buyouts of Harvest Innovations and Caterina Foods, alongside catering to the needs of its health-conscious customers.

Archer Daniels is a leading player in the global food processing industry, with its network spanning across the Americas, Europe and Asia. The company remains focused on strengthening its business through increased cost savings, a key component of its long-term strategy.

Alongside managing its business portfolio, the company has been continuing with its investment activities for business growth. Some of the recent investments include a deal with GLG Life Tech Corporation, to serve customers with low-calorie stevia and monk fruit sweeteners. Further addition of soybean crushing capability enhanced its Straubing facility in Germany, which in turn is likely to help the company cater to the rising consumer demand for non-GMO soybean meal and oil in Western Europe.

We believe that the recent buyout of Caterina Foods is likely to enable Archer Daniels deliver specialty and healthy-flavored pastas and in turn boost the company’s market share by further defining its business operations.

Zacks Rank

Currently, Archer Daniels has a Zacks Rank #3 (Hold). Some better-ranked stocks include Fresh Del Monte Produce Inc. (FDP - Free Report) , Omega Protein Corporation (OME - Free Report) and US Foods Holding Corp. (USFD - Free Report) .

Fresh Del Monte is currently hovering close to its 52-week high of $60.85 and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Omega Protein, a Zacks Rank #1 stock, has a long-term earnings growth rate of 8.00%.

US Foods, a Zacks Rank #1 stock, has a long-term earnings growth rate of 18.60%.

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