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3 Factors That Make Pilgrim's Pride (PPC) a Delightful Pick

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Pilgrim’s Pride Corporation (PPC - Free Report) looks tempting, given its robust growth strategies that have been driving its shares. Notably, this Zacks Rank #1 (Strong Buy) stock has rallied as much as 26% in the past three months, outpacing the industry’s growth of 12.8%.

Let’s delve deeper into this meat products company’s growth story.



Buyouts & More Growth Initiatives

Pilgrim’s Pride has been gradually strengthening its competency on the back of business acquisitions like the GNP Company and the Moy Park, among others. Further, its focus on key customers is a pathway for refining portfolio and creating competitive advantages over its peers. Apart from this, the company has been steadily augmenting marketing support of its brands, as they expand and enter new regions.

Additionally, the company resorts to frequent supply-chain improvements to enhance efficiency and reduce costs. In this respect, the company has been progressing well with developing automation technology for its processing plants. Introduction of such advanced technology is expected to increase efficiency and aid in combating labor availability issues. Along with this, the company’s dedicated efforts, including zero base budgeting and positive impacts from acquisitions, are expected to create synergies of $50 million in the next two years.

Strong Prepared Foods Unit

The company’s Prepared Foods business is growing under brands such as Premium Pilgrims and Del Dia. These brands are gaining from favorable consumer acceptance. The company plans to continue making investments to strengthen this unit. In this respect, the company plans to innovate products and improve marketing capabilities. Management expects the Prepared Foods category to account for a larger portion of the company’s sales. Markedly, revenues and volumes in this category witnessed year-over-year growth of 17% and 15% during the first quarter of 2019, respectively.

Expanding in the Fresh Food Space

Pilgrim’s Pride consistently strives to improve portfolio and competitive position through innovations. In this respect, the company has been expanding in the fresh food offerings space. In fact, the launch of fresh chicken products under premium Pilgrim’s brand has been receiving favorable consumer response. Further, the company is on track to expand in the gluten-free products space. Moreover, the company expects organic products, including No-Antibiotics-Ever products, to account for nearly 40% of U.S. fresh portfolio in 2019.

All said, Pilgrim’s Pride is set to continue with its growth story.

Looking for More Food Stocks? Check These

Sanderson Farms (SAFM - Free Report) , with a Zacks Rank #1, has delivered back-to-back earnings surprises in the last two quarters. You can see the complete list of today’s Zacks #1 Rank  stocks here.

Tyson Foods (TSN - Free Report) , with a Zacks Rank #2 (Buy), has delivered an average positive earnings surprise of 10.2% in the trailing four quarters.

J&J Snack Foods (JJSF - Free Report) , also with a Zacks Rank #2, delivered back-to-back surprises in the last two quarters.

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