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3 Food Stocks Set to Trump Estimates This Earnings Season
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The initial pointers for the third-quarter earnings season are quite impressive and instill optimism for the rest of the quarter. Per the latest Earnings Preview, almost 84 S&P 500 members have reported their quarterly outcomes. Total earnings for these companies depict an increase of 19.2% year over year on 8.4% higher revenues. Moreover, 82.1% of these companies have cruised ahead of earnings estimates, while 61.9% have surpassed top-line expectations.
The impressive start to the season indicates that the growth witnessed in the first half of 2018 is likely to continue in the quarter as well. In fact, overall earnings for the S&P 500 companies are expected to be up 19.2% on 7.2% growth in revenues.
However, the show is yet to take a full swing, as a significant chunk of the S&P 500 members are yet to report their quarterly results. Moreover, we are yet to see results from most food stocks that form part of the Consumer Staples sector which is currently placed among the bottom 25% out of all Zacks sectors. On that note let’s take a look at how the food space is placed this earnings season.
How is the Food Space Faring?
The Zacks Food-Miscellaneous industry is currently ranked at the bottom 20% of more than 250 Zacks industries. Players in the industry have been sailing on rough seas lately, thanks to rising costs. Food companies have been witnessing input cost inflation for a variety of commodities. Moreover, persistently rising freight expenses, stemming from lack of truck supplies and drivers, are acute concerns. To top these, increased demand conditions have put pressure on supply chain structures. Additionally, competition stakes in the food space have been steadily rising, as more companies enter the arena with novel offerings.
These headwinds have been weighing on profits of several members operating in the food space. In fact, the industry has underperformed the S&P 500 in the past year. Stocks in the industry have inched down 0.8% in the past year. Meanwhile, the Zacks S&P 500 Composite has rallied 10.3%, whereas the Zacks Consumer Staples Sector has lost 5.6%.
While these factors make us jittery about the performance of food stocks in the quarter to be reported, we expect the companies to keep gaining from prudent acquisitions, impactful promotional skills and innovations, which have been their growth drivers. Notably, rising health consciousness is propelling companies to augment organic and natural offerings, which in-turn has been aiding revenue expansion. Apart from these, companies in the space are resorting to cost-saving measures to combat high input and logistics expenses. Markedly, such well-chalked strategies have boosted the performance of few players in this space who have already reported their quarterly numbers, such as McCormick & Company (MKC - Free Report) and General Mills (GIS - Free Report) .
Although there are several challenges plaguing the performance of food companies, the aforementioned initiatives make us optimistic about performance of certain players from this arena. That said, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.
Picking the Prospective Winners for the Season
The Zacks methodology helps to identify food stocks that not only boast solid fundamentals but are also poised to beat earnings estimates this earnings season. Our research shows that for stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, the chance of a positive earnings surprise is as high. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
That said, investors can count on these stocks which are most likely to top estimates.
The Hain Celestial Group, Inc. (HAIN - Free Report) , which is expected to report first-quarter fiscal 2019 results in early November, is a solid bet. The company’s Earnings ESP of +0.63% and Zacks Rank #3 make us reasonably confident of a positive surprise. We expect the company’s performance to gain from investments in brand development as well as efforts to improve distribution. Further, savings and productivity gains from Project Terra are also encouraging. We note that the Zacks Consensus Estimate for earnings for the impending quarter is currently pegged at 13 cents per share.
Another stock worth considering is Nomad Foods Limited (NOMD - Free Report) , which has an Earnings ESP of +3.70% and a Zacks Rank #3. This frozen food products and ready-to-cook meals manufacturer is scheduled to post third-quarter 2018 results on Nov 8. The Zacks Consensus Estimate for the quarter to-be-reported is currently pegged at 27 cents. We note that the company has delivered positive earnings surprises in the trailing four quarters.
Another viable option is Smart & Final Stores, Inc. , a popular food retailer in the United States. The company is likely to release third-quarter 2018 results in late November. The stock carries a Zacks Rank #3 and has an Earnings ESP of +10.47%. The Zacks Consensus Estimate for the quarter is pegged at 17 cents. The company has a long-term earnings growth rate of 11%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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3 Food Stocks Set to Trump Estimates This Earnings Season
The initial pointers for the third-quarter earnings season are quite impressive and instill optimism for the rest of the quarter. Per the latest Earnings Preview, almost 84 S&P 500 members have reported their quarterly outcomes. Total earnings for these companies depict an increase of 19.2% year over year on 8.4% higher revenues. Moreover, 82.1% of these companies have cruised ahead of earnings estimates, while 61.9% have surpassed top-line expectations.
The impressive start to the season indicates that the growth witnessed in the first half of 2018 is likely to continue in the quarter as well. In fact, overall earnings for the S&P 500 companies are expected to be up 19.2% on 7.2% growth in revenues.
However, the show is yet to take a full swing, as a significant chunk of the S&P 500 members are yet to report their quarterly results. Moreover, we are yet to see results from most food stocks that form part of the Consumer Staples sector which is currently placed among the bottom 25% out of all Zacks sectors. On that note let’s take a look at how the food space is placed this earnings season.
How is the Food Space Faring?
The Zacks Food-Miscellaneous industry is currently ranked at the bottom 20% of more than 250 Zacks industries. Players in the industry have been sailing on rough seas lately, thanks to rising costs. Food companies have been witnessing input cost inflation for a variety of commodities. Moreover, persistently rising freight expenses, stemming from lack of truck supplies and drivers, are acute concerns. To top these, increased demand conditions have put pressure on supply chain structures. Additionally, competition stakes in the food space have been steadily rising, as more companies enter the arena with novel offerings.
These headwinds have been weighing on profits of several members operating in the food space. In fact, the industry has underperformed the S&P 500 in the past year. Stocks in the industry have inched down 0.8% in the past year. Meanwhile, the Zacks S&P 500 Composite has rallied 10.3%, whereas the Zacks Consumer Staples Sector has lost 5.6%.
While these factors make us jittery about the performance of food stocks in the quarter to be reported, we expect the companies to keep gaining from prudent acquisitions, impactful promotional skills and innovations, which have been their growth drivers. Notably, rising health consciousness is propelling companies to augment organic and natural offerings, which in-turn has been aiding revenue expansion. Apart from these, companies in the space are resorting to cost-saving measures to combat high input and logistics expenses. Markedly, such well-chalked strategies have boosted the performance of few players in this space who have already reported their quarterly numbers, such as McCormick & Company (MKC - Free Report) and General Mills (GIS - Free Report) .
Although there are several challenges plaguing the performance of food companies, the aforementioned initiatives make us optimistic about performance of certain players from this arena. That said, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.
Picking the Prospective Winners for the Season
The Zacks methodology helps to identify food stocks that not only boast solid fundamentals but are also poised to beat earnings estimates this earnings season. Our research shows that for stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, the chance of a positive earnings surprise is as high. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
That said, investors can count on these stocks which are most likely to top estimates.
The Hain Celestial Group, Inc. (HAIN - Free Report) , which is expected to report first-quarter fiscal 2019 results in early November, is a solid bet. The company’s Earnings ESP of +0.63% and Zacks Rank #3 make us reasonably confident of a positive surprise. We expect the company’s performance to gain from investments in brand development as well as efforts to improve distribution. Further, savings and productivity gains from Project Terra are also encouraging. We note that the Zacks Consensus Estimate for earnings for the impending quarter is currently pegged at 13 cents per share.
Another stock worth considering is Nomad Foods Limited (NOMD - Free Report) , which has an Earnings ESP of +3.70% and a Zacks Rank #3. This frozen food products and ready-to-cook meals manufacturer is scheduled to post third-quarter 2018 results on Nov 8. The Zacks Consensus Estimate for the quarter to-be-reported is currently pegged at 27 cents. We note that the company has delivered positive earnings surprises in the trailing four quarters.
Another viable option is Smart & Final Stores, Inc. , a popular food retailer in the United States. The company is likely to release third-quarter 2018 results in late November. The stock carries a Zacks Rank #3 and has an Earnings ESP of +10.47%. The Zacks Consensus Estimate for the quarter is pegged at 17 cents. The company has a long-term earnings growth rate of 11%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>