Seeking Alpha: McCormick Spanks The Skeptics, But Not Exactly A Bargain

Spice, seasoning, and packaged food giant McCormick (MKC) has long enjoyed a privileged position in the food sector, as investors have been willing to pay a premium for shares in a company that holds uncommonly high market share and ups its dividend like clockwork. The shares were caught in the downdraft that saw other food stocks trailing the S&P 500 after mid-2013, but took an even steeper move down when management handed out weak 2014 guidance at the end of January.

Analysts suddenly started worrying about valuation on stock where valuation really hadn't mattered before, but then first quarter earnings came in higher than expected and sent the shares up more than 5%. McCormick is still expensive, but bulls can build a credible argument that the company's consistent double-digit ROICs and dividend hikes merit a much lower discount rate and that the shares are still a worthwhile holding for long-term investors.

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McCormick Spanks The Skeptics, But Not Exactly A Bargain

Seeking Alpha: For Pinnacle Foods, Slowly Does It

If you're looking for a dynamic revenue growth story, you probably want to look somewhere other than at Pinnacle Foods (PF). Pinnacle's management is realistic, looking for growth in line with the industry categories and focusing instead on optimizing cost and operating leverage. With several other brands and food businesses likely up for sale and opportunities for additional gross margin improvements, Pinnacle Foods still offers some respectable upside for patient investors.

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For Pinnacle Foods, Slowly Does It

Investopedia: Smucker Does Alright, But The Street Goes Away Disappointed

I liked J.M. Smucker (NYSE:SJM) on a relative basis back in November, and the stock hasn't disappointed since – trading up about 20% and slightly outperforming peers like General Mills (NYSE:GIS), Kellogg (NYSE:K), and Kraft (Nasdaq:KRFT) in the packaged food space. I still like Smucker as a company – management is happy to run a business of relatively small, focused, market-leading brands, and run them pretty profitably. While guidance of a year-on-year decline in free cash flow (FCF) and stagnant sales may have disappointed the Street, this still remains a relatively interesting name in the food space.

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http://www.investopedia.com/stock-analysis/060713/smucker-does-alright-street-goes-away-disappointed-sjm-hrl-clx-gis-krft.aspx

Investopedia: General Mills Third Quarter Earnings

When Heinz (NYSE:HNZ) drew a premium-priced buyout bid from 3G Capital and Berkshire Hathaway (NYSE:BRK.A, BRK.B), investors got giddy about revaluing the entire packaged food sector. Unfortunately, that looks a bit indiscriminate when it comes to General Mills (NYSE:GIS). While this isn't a bad business per se, nor is it one where a buyer couldn't find some room for improvement - it doesn't have the same sort of brands, market share or international profile. General Mills' fiscal third quarter earnings weren't bad, but the shares are trading in excess of fair value today and don't look like a great holding at these prices.

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Seeking Alpha: Brasil Foods Moving From Tyson Towards Nestle

Lack of ambition has never been a problem at Brasil Foods (BRFS). While over a third of the company's revenue currently comes from commodity meat exports to the Mideast, Africa, and Asia, Brasil Foods has made it abundantly clear that they don't see other Brazilian protein companies like Marfrig or JBS as their true long-term peers, nor American protein companies like Tyson (TSN) or Smithfield (SFD). No, Brasil Foods is playing for larger stakes - looking to become the developing world's answer to Nestle (NSRGY.PK), and they may just be ambitious enough to pull it off.

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Brasil Foods Moving From Tyson Towards Nestle

Seeking Alpha: Kraft's Cheese Has Already Been Moved Far Enough

When companies announce major spin-offs or splits, they usually promise that the separation will unlock substantial value for shareholders and allow the two businesses to operate better. While time will tell about that latter part, maybe there was some value created in splitting Mondelez (MDLZ) and Kraft Foods (KRFT). At the current price, Kraft doesn't look like a bargain, nor does Mondelez, as both seem more overvalued apart than they did together. While Kraft Foods has numerous opportunities to improve performance in the coming years, it looks like the Street has already assumed that one way or another those improvements are as good as done.

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Kraft's Cheese Has Already Been Moved Far Enough

Seeking Alpha: Mondelez's Sugary Valuation Could Cause Wealth Decay

I can understand why investors like Mondelez (MDLZ). The company is not only #1 or #2 in most of its products and markets, but it has been deliberately assembled to address faster-growing markets in the larger packaged food industry. On top of that, this company has some of the highest exposure to emerging markets in the sector. Yet for all of those positives, I do think investors should be careful about what they pay, as expectations for this company are already pretty significant.

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Mondelez's Sugary Valuation Could Cause Wealth Decay

Seeking Alpha: Hormel Buys Skippy: Bold Move Forward, Or Future Sticky Mess?

Give credit where due - Hormel (HRL) is not just playing lip-service to the idea of being a more diversified packaged foods player. While many companies talk about wanting to make bold moves, Hormel has shown over and over again that its management team is actually willing to do it. The question, though, is whether the company's $700 million purchase of the Skippy peanut butter brand from Unilever (UL) is a bold move forward for the business, or a step too far outside of its competency.

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Hormel Buys Skippy: Bold Move Forward, Or Future Sticky Mess?

Investopedia: General Mills Still A Good News, Bad News Story

I haven't felt all that adamantly positive or negative about General Mills (NYSE:GIS) for a while now. While the company has some definite positives in its favor (a history of innovation and good international growth potential), it is also struggling with weak volumes and share loss in key categories. With the price close to fair value and an uncertain retail strategy in the United States, I'd still just as soon own other stocks in the consumer staples area.

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http://www.investopedia.com/articles/active-trading/12/general-mills-still-a-good-news-bad-news-story.asp

Investopedia: Volatile Smithfield Delivers A Good Quarter

As I've written a few times before, when it comes to protein producers such as Tyson (NYSE:TSN), Smithfield (NYSE:SFD) and Pilgrim's Pride (NYSE:PPC), above-average year-to-year and quarter-to-quarter volatility is just the way these businesses are. While Smithfield delivered a surprisingly good fiscal second quarter, investors considering these shares need to realize that this is a tough industry in which to try to earn long-term economic returns.

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http://www.investopedia.com/stock-analysis/2012/Volatile-Smithfield-Delivers-A-Good-Quarter-SFD-TSN-HRL-KRFT1210.aspx

Investopedia: Dean Foods Checks Another Major Item Off The To-Do List

The restructuring/repositioning of Dean Foods (NYSE:DF) has taken another significant step forward. On Monday before the open, the country's largest dairy processor announced that it had reached a long-awaited agreement to sell its Morningstar business. While Dean Foods got a reasonable price for this asset, it's still an open question as to whether Dean Foods' overall operating strategy can reward shareholders.

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http://www.investopedia.com/stock-analysis/2012/Dean-Foods-Checks-Another-Major-Item-Off-The-To-Do-List-DF-WWAV-KRFT-CAG1204.aspx

Investopedia: Green Mountain Coffee Roasters Gives The Street A Jolt

Apparently reports of the demise of Green Mountain Coffee Roasters (Nasdaq:GMCR) have been at least a little exaggerated. While the market pioneer for single-serve coffee brewing has some formidable challenges coming from increased competition, it's worth remembering that the consumer products market is not like the prescription drug market where generic launches immediately drive prices into the cellar. That said, it's not as though Green Mountain's valuation marks this out as an especially cheap stock today.

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http://www.investopedia.com/stock-analysis/2012/Green-Mountain-Coffee-Roasters-Gives-The-Street-A-Jolt-GMCR-KRFT-SJM-SBUX1128.aspx

Investopedia: Hormel Can't Escape The Retail Tarpits

Volume growth is hard to come by in the food sector today, and even a very well-run company like Hormel Foods (NYSE:HRL) can't escape that forever. With health and economic factors translating into less animal protein consumption, and grain costs likely to work their way through the animal production cycle in 2013, these aren't the easiest of times for Hormel. Although I think the company's strong operating capabilities and focus on packaged/value-added foods will give it an edge on the likes of Tyson (NYSE:TSN) and Smithfield (NYSE:SFD), I'd be careful chasing the stock so close to a 52-week high and a double-digit EV/EBITDA ratio.

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http://www.investopedia.com/stock-analysis/2012/Hormel-Cant-Escape-The-Retail-Tarpits-HRL-TSN-HSH-KRFT1122.aspx

Investopedia: Even With A So-So Quarter, Smucker Looks Worth Watching

There aren't many bargains in packaged foods these days, and it seems like all too many quarterly reports require a little explanation. That said, J.M. Smucker (NYSE:SJM) still looks like a worthwhile name that could offer investors some upside. Management still needs to improve how it utilizes its assets, but volume trends are looking OK and the stock's valuation looks like a relative bargain in the space.

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