Advances in meals processing methods, enhancements in supply companies, persevering with distant life as a result of pandemic, and a rising demand by shoppers for ready-to-cook, easy-to-eat meals are driving the expansion of the packaged meals trade. The worldwide packaged meals market is anticipated to succeed in $3.41 trillion by 2030, registering a 5.2% CAGR. The trade’s strong development prospects have inspired a number of new gamers to enter the market over the previous yr, making it extra aggressive.
Though the agricultural e-commerce and expertise enterprise Farmmi, Inc.’s (FAMI) revenues elevated 31% year-over-year to $17.79 million in its final reported quarter, the inventory has misplaced 74.1% in value over the previous 9 months and 70.7% over year-to-date. Moreover, FAMI has been volatile over the past 90 days. Thus, we expect FAMI will not be the correct alternative for cashing in on the trade tailwinds.
As an alternative, we expect Flowers Meals, Inc. (FLO), Sanderson Farms, Inc. (SAFM), and Herbalife Diet Ltd. (HLF), which have carried out higher than FAMI over the previous months and possess robust fundamentals, may very well be ideally suited bets to capitalize on the trade’s strong development prospects.
Flowers Meals, Inc. (FLO)
Thomasville, Ga.-based FLO offers a variety of bakery meals to retail and meals service clients within the U.S. The corporate presents bread, buns, rolls, snack truffles, and tortillas by the corporate’s direct-store supply (DSD) community. FLO additionally offers frozen bakery merchandise and snack truffles nationally by clients’ warehouses. The corporate markets its merchandise below Nature’s Personal, Dave’s Killer Bread (DKB), Marvel, Canyon Bakehouse, Tastykake, Sunbeam Bread, Merita, European Bakers, Butternut, Bunny Bread, and Mrs. Freshley’s model names.
For the second quarter, ended July 17, 2021, FLO’s gross sales got here in at $1.02 billion. The corporate’s internet revenue amounted to $56.36 million, and its EPS got here in at $0.26 for the interval. Additionally, its cash and cash equivalents got here in at $292.27 million.
FLO’s income is anticipated to extend 1.6% year-over-year to $4.35 billion in its fiscal yr 2022. The corporate has surpassed the consensus EPS in every of the trailing 4 quarters, and its EPS is anticipated to develop 1.7% subsequent yr. The inventory has climbed 12.2% in value over the previous 9 months and 11.8% year-to-date.
FLO’s robust fundamentals are mirrored in its POWR Ratings. The inventory has an general B ranking, which equates to a Purchase in our proprietary ranking system. The POWR Rankings assess shares by 118 distinct components, every with its personal weighting.
Additionally, the inventory has a B grade for Worth and High quality. We now have additionally graded FLO for Stability, Sentiment, Momentum, and Progress. Click here to entry all FLO’s scores. FLO is ranked #13 of 80 shares within the C-rated Food Makers trade.
Sanderson Farms, Inc. (SAFM)
SAFM is a vertically built-in poultry processing firm that markets and distributes recent, frozen, and ready hen merchandise in america. The Laurel, Miss., firm presents ice-packed, chill-packed, bulk-packed, and frozen hen below the Sanderson Farms model. As well as, SAFM offers ready hen merchandise and shopper packaged partially cooked or marinated hen objects for distributors and meals service institutions.
Throughout its fiscal third quarter, ended July 31, 2021, SAFM’s internet gross sales elevated 41.4% year-over-year to $1.35 billion. The corporate’s working revenue grew 439.8% from its year-ago worth to $215.22 million. Its internet revenue rose 402.2% from the prior-year quarter to $164.76 million. Additionally, the corporate’s EPS elevated 398.6% year-over-year to $7.38.
SAFM’s income is anticipated to extend 31.3% year-over-year to $4.68 billion in its fiscal yr 2021. The corporate has a powerful earnings shock historical past; it beat the consensus EPS estimates in every of the trailing 4 quarters, and its EPS is estimated to develop 1,434.6% within the present yr. The inventory has soared 46.7% in value over the previous yr.
SAFM’s POWR Rankings replicate this promising outlook. The inventory has an general B ranking, which equates to a Purchase in our proprietary ranking system. Additionally, the inventory has an A grade for Progress, and a B grade for Worth and High quality.
Along with the POWR Ranking grades I’ve simply highlighted, one can see SAFM’s scores for Stability, Sentiment, and Momentum here. SAFM is ranked #10 within the Food Makers trade.
Herbalife Diet Ltd. (HLF)
HLF is a worldwide diet firm that gives weight administration merchandise, together with meal alternative, protein shakes, drink mixes, weight reduction enhancers, and wholesome snacks. The George City, Cayman Islands-based concern’s working segments are based mostly in six areas–North America; Mexico; South and Central America; EMEA; Asia Pacific, and China. As well as, HLF offers literature, promotional, and different supplies, together with start-up kits, gross sales instruments, and academic supplies.
This month, HLF launched plant-based protein immediate soup within the U.S. and Puerto Rico. The corporate believes that by science-based innovation, HLF ought to have the ability to present a whole-day handy and protein-rich nutritious snack to the shoppers.
Throughout the third quarter, ended September 30, 2021, HLF’s internet gross sales got here in at $1.43 billion. The corporate’s internet gross sales below the Asia Pacific area elevated 10.6% year-over-year to $393.5 million. Additionally, its gross revenue amounted to $1.13 billion, and its working revenue was $189.4 million through the interval.
HLF’s $5.87 billion consensus income estimate for its fiscal interval ending December 2021 represents a 5.9% enhance year-over-year. Its EPS is anticipated to develop 29.3% within the present yr. Moreover, the corporate has a powerful earnings shock historical past; it beat the consensus EPS estimates in three of the trailing 4 quarters.
It’s no shock that HLF has an general B ranking, which equates to a Purchase in our POWR Ranking system. Additionally, the inventory has an A grade for High quality, and a B grade for Worth.
Click here to see the extra POWR Rankings for HLF (Sentiment Stability, Momentum, and Progress). HLF is ranked #5 of 11 shares within the B-rated Medical – Consumer Goods trade.
FLO shares have been buying and selling at $25.38 per share on Wednesday morning, down $0.14 (-0.55%). Yr-to-date, FLO has gained 15.12%, versus a 25.94% rise within the benchmark S&P 500 index throughout the identical interval.
Concerning the Creator: Priyanka Mandal
Priyanka is a passionate funding analyst and monetary journalist. After earning a master’s degree in economics, her curiosity in monetary markets motivated her to start her profession in funding analysis. More…
