Investopedia: Waiting For Hormel To Get Cheaper Isn't Getting Any Easier

Once in a while even the best-loved food and beverage companies will sell off on concerns about organic growth trends or margin worries. So far, though, it looks like Hormel (NYSE:HRL) is largely immune, as although margins came up a little light this quarter, the Street seems willing to look past one quarter and remain focused on the attractive, higher-margin business management is building.

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http://www.investopedia.com/stock-analysis/082213/waiting-hormel-get-cheaper-isnt-getting-any-easier-hrl-krft-hsh-tsn.aspx

Investopedia: Hain Celestial's Valuation Already Incorporates Strong Expectations

Even as someone who isn't all that interested in the “healthy lifestyle” trends of today, I find it interesting to see the sort of visceral reactions that stocks like Hain Celestial (Nasdaq:HAIN), White Wave (Nasdaq:WWAV), and Annie's (Nasdaq:BNNY) provoke in investors/readers. In particular, there appears to be a very vocal percentage out there that are just incensed over the valuation and attention these stocks get and absolutely insistent that healthy/organic eating is just a fad.

Whether it's a fad or not (I happen to lean toward “not”, even though I don't participate), there's no question that these stocks have generated some sizable expectations on the Street. As one of the veterans of the sector, Hain Celestial is a good case in point – today's valuation already more than incorporates assumptions that Hain will significantly outgrow the packaged food sector and generate above-average long-term profits. So much so, in fact, that I find it hard to see how the company can live up to (or grow into) these expectations.

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Investopedia: History Suggests Street Will Get Over "Disappointing" Smucker Results

I don't want to spend too much time defending Smucker's (NYSE:SJM) fiscal first quarter results, as I thought they were fine. Still, the Street is likely to be concerned about the pace of growth in K-Cups and the question of whether the company can maintain its significant share in the retail coffee business against the likes of Kraft (Nasdaq:KRFT), Green Mountain (Nasdaq:GMCR), and Starbucks (Nasdaq:SBUX). To the extent that history is any indication, I expect Smucker shares will be fine, though the valuation has gotten a bit steep in a still-expensive packaged food sector.

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Investopedia: Weaker Organic Growth Creating An Opportunity In Nestle

Swiss food giant Nestle (Nasdaq:NSRGY) is a remarkable company in several respects. Despite being one of the largest food companies in the world, Nestle continues to focus on ongoing product innovation and is closing in on generating half of its sales from emerging markets. Add 20 billion-dollar brands and a long track record of out-earning its cost of capital, and it's not too hard to see why Nestle shares often trade at a premium.

“Often” is not the same as always, though, and a recent slowdown in organic sales growth seems to have created a window of opportunity in these shares. Investors have to accept the risk that the company will fail to deliver 5% organic growth for 2013, but the long-term opportunity makes this a name worth considering.

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http://www.investopedia.com/stock-analysis/081213/weaker-organic-growth-creating-opportunity-nestle-nsrgy-krft-gis-ul.aspx

Investopedia: Wall Street All In On Kraft's Improvement Potential

The way many sell-side analysts talk about Kraft Foods (Nasdaq:KRFT) and the company's CEO Tony Vernon, you would think they make sure to never go to bed at night before kissing a picture of them both and writing their names with little hearts substituting for the “o's”. And this is for a company whose organic growth just hasn't been that good since the split with Mondelez (Nasdaq:MDLZ).

Now, to be fair, I do think Kraft is a good business and a very well-run company. In more than a few cases, Kraft either dominates its category or frankly is the category. Moreover, I like the motivational approach the company takes toward incentivizing employees, the company's focus on innovation, and its willingness to shift resources away from brands that can't carry their own luggage. On the other hand, while I do share Wall Street's optimism that Kraft will eventually post margins and free cash flow that are just as good as, if not leading, its peers, the valuation already assumes precisely that.

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Investopedia: BRF SA Serves Up A Feast For Investors

For reasons completely unknown to me, Investopedia editors chose to change the company name to "BRF SA" instead of Brasil Foods... 

The argument I've made for some time with BRF S.A. (Nasdaq: BRFS) is that this company is on a long-term plan to transform itself from a commodity- and export-driven protein company into a global branded food company like Kraft (Nasdaq:KRFT) or Nestle (Nasdaq:NSRGY). With that, I not only expect significant growth, but significant margin and free cash flow expansion over the next decade. BRF S.A. is by no means cheap according to conventional metrics, but the shares are still slightly undervalued on a cash flow basis and offer investors good exposure to emerging market consumer spending growth.

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http://www.investopedia.com/stock-analysis/073013/brf-sa-serves-feast-investors-brfs-tsn-hrl-krft-nsrgy.aspx

Investopedia: ConAgra Does Appear To Be On A Better Path

It's been easy to criticize ConAgra (NYSE:CAG) management over the years, as relatively ham-fisted management of junior varsity brands has led to pretty pathetic growth and margin performance relative to its peers. What's true about the past is not automatically true about the future, though, and I think ConAgra is in perhaps the best shape it has been in the time I've watched the company. There's still a lot of work to be done in improving margins and cash generation, but in an overvalued sector ConAgra looks like an interesting relative value.

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http://www.investopedia.com/stock-analysis/062713/conagra-does-appear-be-better-path-cag-gis-krft-hrl-hnz.aspx

Investopedia: General Mills Getting Back To Normal

Maybe the markets are getting a bit more rational when it comes to packaged food companies. With many of these stocks up 20% or more over the past year, the last couple of months has seen the momentum fade a bit. Arguably that's a good thing for stocks like General Mills (NYSE:GIS) where the company's self-improvement efforts are likely to be more of the slow-and-steady variety. Although General Mills is back below fair value and arguably a decent long-term hold, it's not likely to deliver another “Market-plus-10%” sort of performance over the next twelve months.

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Investopedia: Annie's Still A High Growth-High Multiple Proposition

The hot packaged food market has cooled a bit recently, but Annie's (NYSE:BNNY) continues to sport a rich multiple as a relatively rare high-quality play on consumer demand for natural and organic food. Annie's isn't just a healthy living play, though, as the company is still relatively young and can look forward to years of product introductions and further distribution leverage. I recognize that growth investors tend to emphasize opportunities more than multiples, but more value-conscious investors may not find Annie's so appealing today.

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Investopedia: Mondelez Isn't As Good As Nestle, But Priced Like It Is

While I realize that Wall Street typically prices stocks on the basis of what investors believe a company will look like in the future, I'm still surprised by the relative valuations that come out of the process. Take the case of Mondelez (Nasdaq:MDLZ). This company is focused on multiple growth areas in the packaged food space (and has a large developing market exposure) and does indeed post better growth than many of its peers, but the overall combination of growth and margins wouldn't normally seem to argue for valuation on par with Kellogg (NYSE:K) or Nestle (Nasdaq:NSRGY). Consequently, although I do expect Mondelez to do well relative to its sector in terms of reported growth, I continue to believe that valuation is already too steep.

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http://www.investopedia.com/stock-analysis/050813/mondelez-isnt-good-nestle-priced-it-mdlz-k-nsrgy-pep-krft.aspx

Investopedia: Annie's Surfing A Rising Tide In Food

Annie's (NYSE:BNNY) looks like one of those companies that is destined to be controversial and frustrating for the skeptics. The company's business model is predicated on selling premium-priced packaged foods to customers who believe it's somehow better for them, and while skeptics will almost certainly question how sustainable that model is, plenty of companies have prospered for years by selling people on the notion that there is value in paying up for their particular products.

In the meantime, the more pressing financial questions revolve around the company's ability to successfully introduce new products and drive better margins while they do. Not surprisingly, the stock is no particular bargain today, but growth investors are not likely to abandon it for that particular reason.

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Investopedia: PepsiCo Shows That Snacks And Sodas Aren't Bulletproof

As seems to be the case with Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP) is not presently delivering the sort of results that its premium valuation would seem to demand. Certainly some of this can be tied to investor confidence - Coca-Cola and PepsiCo may wobble from time to time, but they eventually get their affairs in order and get back to the business of wringing above-average profits from strong global brands. That said, while I do believe PepsiCo has some good things going for it, I see no reason to pay up for the stock today.

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Financial Edge: The Risky Business Of Courting LGBT Customers

Whether it's due to the rise of social media and the phenomenon of the immediate sharing of views and opinions or just an intensification of the "culture wars" that seem to occur everywhere throughout history, where we eat and shop now has more political and social overtones than ever before. In particular, companies are finding that they must be very careful in how they attempt to position themselves towards Lesbian, Gay, Bisexual and Transgendered (LGBT) customers.

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http://www.investopedia.com/financial-edge/0812/The-Risky-Business-Of-Courting-LGBT-Customers.aspx#axzz25zQqlxm9

Investopedia: Still Waiting For A Better Plan From Campbell Soup

For a company with what should otherwise be a simple business, Campbell Soup (NYSE:CPB) offers up more than a few questions. Can the company stem its share losses in soup? Can the company effectively compete with the likes of Kellogg (NYSE:K) and Kraft (Nasdaq:KFT) in snacks? Does management really have a solid long-term growth strategy? How you see the answers to these questions goes a long way toward answering whether this is a good stock to own for the next few years.

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Investopedia: Smucker Still A Relatively Tasty Option

I liked J.M. Smucker (NYSE:SJM) as one of my favorite food stocks a few months ago, and neither the company nor the stock have done anything to disappoint me since then. While valuation has certainly increased and the packaged food sector is still seeing pressure, Smucker remains a pretty solid idea in a sector that often sports a premium due to its perceived safety in tougher times.

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Investopedia: Change Is Coming At PepsiCo, One Way Or Another

It is interesting how Wall Street will seem to reward companies that are, in many respects, underperformers. One such example is the relative valuation between Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP). Relative to the possible future cash flow streams, the companies seem roughly equally valued, even though Coca-Cola is in most relevant respects the superior operator. What that tells me is that the Street already assumes that PepsiCo's restructuring efforts will either succeed or that the company will take more dramatic steps, including a potential break-up.

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http://stocks.investopedia.com/stock-analysis/2012/Change-Is-Coming-At-PepsiCo-One-Way-Or-Another-PEP-KO-KFT-K0726.aspx

Investopedia: Smithfield's Miss May Be An Opportunity

Companies that operate in commodity markets often require a bit of reverse psychology when it comes to their stocks. Invest in protein producers like Tyson (NYSE:TSN) or Smithfield (NYSE:SFD) when times are great, and you are likely to be buying into a peak. With that in mind, the lackluster performance of Smithfield in its fiscal fourth quarter, combined with some iffy market fundamentals, might make this a stock worth watching.

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Investopedia: Smucker A Relatively Interesting Play In Food

As I've mentioned often in recent weeks and months, investors have reacted to the uncertain global growth outlook by bidding up the shares of those stocks and sectors seen as safe and relatively inelastic, and food has been one of the primary targets. While Smucker (NYSE:SJM) does have some challenges from private label competition, and the long-run returns on capital have not been good, the combination of growth, share and valuation makes this a relatively interesting stock to consider today.

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Investopedia: Heinz's Growth Doesn't Seem To Merit This Kind Of Premium

There's quite a lot to like about Heinz (NYSE:HNZ). No other company really comes close to matching their U.S. share in condiments like ketchup or Worcestershire sauce, and the company has enviable exposure to faster-growing emerging markets. That said, the company's North American growth really isn't that much better than its peer group and earnings are going to be pressured by increased spending to grow the emerging market businesses. With that in mind, paying a premium for Heinz's stock today seems like a bad move.

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Investopedia: Hormel Doing Better Than Most

These aren't easy times for food companies, as rising input prices push up costs and shoppers rebel against price increases. Hormel Foods (NYSE:HRL) seems to be holding up better than most, though, as the company's expense control and increased focus on processed/packaged goods pays benefits. Hormel looks like one of the best long-term stories in food right now, but the valuation means that investors shouldn't expect outsized capital gains from the shares.

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