ConAgra Foods (NYSE: CAG) is a top food producer, offering packaged and frozen foods, seafood and dairy products to retail, foodservice, commercial product and international customers. Among the company's many brands are Hunt's, Banquet, Chef Boyardee, Van Camp's, Healthy Choice, Orville Redenbacher's, PAM, Slim Jim and Wesson. Major competitors include Kraft Foods (NYSE: KFT) and Unilever (NYSE: UL).

The company pleased investors late last month, when it reported Q3 EPS of 63 cents and revenues of $3.53 billion. Analysts had been expecting 41 cents and $3.20 billion. Management also guided FY08 EPS to $1.80-$1.85 ($1.60 consensus) and announced that it would sell the company's trading and merchandising arm to the Ospraie Special Opportunities fund and others for $2.1 billion.

Shares of food maker ConAgra Foods Inc. (NYSE: CAG) have been soaring in early trading more than 9% after reporting this morning a surge of 60% in its third quarter profit.

The company said its quarterly profit climbed to $309 million, or 63 cents per share due to higher prices and demand for its products. These numbers are up from $193 million, or 38 cents per share reported in the same period a year ago when the company's earnings numbers were dragged down by recall costs. Analysts, on average, expected quarterly earnings of 39 cents per share.

ConAgra's quarterly revenue grew to $3.53 billion, up from $2.9 billion a year ago. Revenue during the period was helped by strong gains from the company's food and ingredients segment which offset soaring commodity costs. Analysts expected the company show sales of $3.17 billion in the third quarter, according to Thomson Financial.

ConAgra Foods, Inc. (NYSE: CAG) shares are trading higher today after the company raised its outlook for Q2 earnings (expected 12/20) due to strong performance in trading and merchandising. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAG.

After hitting a one-year high of $28.35 last December, the stock hit a one-year low of $22.81 in November. CAG opened this morning at $24.90. So far today the stock has hit a low of $24.86 and a high of $25.61. As of 11:20, CAG is trading at $25.56, up $1.17 (4.8%). The chart for CAG looks bearish but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 6.4% return in just 4 months as long as CAG is above $22.50 at March expiration. ConAgra would have to fall by more than 15% before we would start to lose money.
CAG hasn't been below $22.50 at all in the past year and has shown support around $23 recently. This trade could be protected by strong support around $23 where the stock bottomed in early November.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CAG.

ConAgra Foods (NYSE:CAG) has announced a massive recall of all varieties of Banquet brand frozen pot pies as well as store brand frozen pot pies sold by Albertson's, Hill Country Fare, Food Lion, Great Value, Kirkwood, Kroger, Meijer and Western Family.The move comes in response to information ConAgra received from state health officials suggesting some of the products may carry the salmonella bacteria. The company has halted pot pie operations at its Marshall, MO. plant while investigations continue to find the source of the contaminant. The store brands recalled include

• Albertson's (sold at Albertson's);
• Hill Country Fare (sold at HEB);
• Food Lion (sold at Food Lion);
• Great Value (sold at Wal-Mart);
• Kirkwood (sold at Aldi);
• Kroger (sold at Kroger);
• Meijer (sold at Meijer);
• Western Family (now discontinued; previously sold at a variety of small retailers).
  

The company, in cooperation with the USDA, on Tuesday ordered stores to pull the products from their shelves. For a refund, Customers may discard the contents and send the side panel of the package that contains the UPC code to ConAgra Foods, Dept. BQPP, P.O. Box 3768, Omaha, NE 68103-0768. You can also return the product to the store from which it was purchased for a refund.

A nationwide recall of hot-dog chili sauces due to possible botulism bacteria contamination began last Thursday and became larger this past weekend. "Great Value" private-label cans of chili sauce from retailer Wal-Mart Stores Inc. (NYSE: WMT) have been recently also added to the recall list. Other brands on the list include Castleberry's and Austex Hot Dog Chili Sauce.

Here is where things get a little dicey, and probably will continue to do so in the future. If you remember, peanut butter from ConAgra Foods Inc. (NYSE: CAG) was recalled last fall, leaving the Peter Pan brand absent from many grocers' shelves. Now, the chili sauce recall hit the market and it seems that Wal-Mart's private labels aren't immune this time either.

This is not surprising since probably all of Wal-Mart's private-label grocery items are made by the bigger manufacturers. In some cases, the ingredient mix and breakdown is slightly different from the brand names so they don't look and taste exactly like the private-label brands such as Sam's Choice and Great Value.

The question is then, why is it that I rarely see the private-label brands referenced right at the start with the name brands when food recalls happen? Just like with the Peter Pan peanut butter recall months ago, this chili sauce recall did not include Wal-Mart's private-label brands until after the recall was firmly and publicly established. Seeing as Wal-Mart is the nation's largest food retailer, one would think getting recall notices out covering its private-label brands would be first order.

There is an Omaha company that, quite simply, makes some of the most recognizable food brands in the world. Perhaps that is not too surprising; they have been at it since 1919.

ConAgra Foods (NYSE: CAG) offers packaged and frozen foods, seafood and dairy products to retail, foodservice, commercial product and international customers. Among the company's many brands are Hunt's, Banquet, Chef Boyardee, Van Camp's, Healthy Choice, Orville Redenbacher's, PAM, Slim Jim and Wesson. Major competitors include Kraft Foods (NYSE: KFT) and Unilever (NYSE: UL).

The company pleased investors late last month, when it reported Q4 EPS of 39 cents and revenues of $3.33 billion. Analysts had been expecting 31 cents and $2.83 billion. The CEO attributed success to record trading and merchandising profits, continued progress with cost-saving initiatives, and accelerating sales performance for key brands within the Consumer Foods segment. Management also guided FY08 EPS to $1.48, a figure in-line with the average Street estimate.

Peanut butter manufactured under the "Peter Pan" and "Great Value" brands with the product code 2111 by ConAgra Foods (NYSE: CAG) is still making people sick, according to the latest report by the Centers for Disease Control. Although the entire batch of tainted peanut butter has long been pulled from store shelves, it's difficult to remove from consumer's shelves (especially as the two-dollar refund isn't exactly a money-maker). And processed peanut butter (as we well know) seems to last forever; I wouldn't be surprised if first-graders are still toting contaminated sandwiches to school in their lunchboxes next fall.

So as my college track buddy Josephine always said around October when the sniffles would break out around the locker room, "sickness is coming." Sickness is still coming, and likely will continue for some time; 628 cases in a whopping 47 of our 50 U.S. states have been reported, with more than 200 new since March when the CDC last reported (the peanut butter recall was announced in mid-February 2007).

ConAgra won't be producing peanut butter from its Sylvester, Ga. plant again for a while, as renovations to fix the moisture problems blamed for the contamination are still underway; but the company will reintroduce its Peter Pan brand in July. But with customers still sickening, will anyone go back? Would you eat Peter Pan peanut butter again?

While preschool was difficult for my son, who just doesn't like playing according to a schedule, I can gratefully point to one rule I needed help reinforcing: washing his hands. Like all the rest of the kids, he was required to wash hands after going to the potty and before eating snacks.

Clearly, the food workers of America did not learn this lesson.

Salmonella can infect a food in two ways: (1) if the raw meat or uncooked eggs from an infected chicken or other animal is ingested (either by eating raw food or by contaminating other foods with chicken juices, etc.) or (2) a human's feces come into contact with food. Because someone didn't wash his hands after using the potty. The CDC says the source of contamination is "still under investigation," but as this is the first-ever peanut butter contamination I'm just going to go out on a limb and say "human feces."

Peter Pan and Great Value peanut butter products (starting with code 2111) have been recalled by ConAgra Foods, Inc. (NYSE:CAG), thanks to a salmonella outbreak. I'm sure the parents who just sent their children to school with peanut butter and jelly sandwiches told them to wash their hands before lunch.

It's not like this is the first time this has happened, even in the past few months.