This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
While Kraft Foods Inc.'s (NYSE: KFT) Oscar Mayer brand and ConAgra Food Inc.'s (NYSE: CAG) Hebrew National may both have venerable histories, they also have very different personalities: "I wish I were and Oscar Mayer wiener" vs. "We answer to a higher authority."
In 1900, Oscar Mayer and his brothers ran one of the most popular sausage makers in Chicago. They pioneered the use of brand names and voluntary federal approval to protect the reputation of their products. The company was the first to offer packaged sliced bacon. Such innovations helped Oscar Mayer to become an industry leader. The first wiener-mobile rolled out in 1936, and its descendants can still be spotted today. The famous Oscar Mayer jingle was introduced in 1963, and today is one of the longest-running jingles still in use. In 1988 the company launched its Lunchables, prepacked cracker-and-cold-cut school lunches. Oscar Mayer became a Kraft Foods brand in 1989.
Kraft Foods is the largest U.S. food company, with $37.2 billion in sales in 2007. Oscar Mayer is one of seven Kraft Foods brands with more than $1 billion in revenue. The convenience meats category accounted for about 16% of total revenue.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
When it comes to this staple of kitchens and diners worldwide, the most common question after "Is it ketchup or catsup?" has got to be "Heinz or Hunt's?"
The Hunt Brothers Fruit Packing Company was founded in 1890 by Joseph and William Hunt in Santa Clara, California. It was a small canning business on the ground of a ranch, delivered locally by horse-drawn carriage. In 1946, tomato sauce became the flagship product, and a marketing push made the little red cans familiar across the U.S., and lead to plethora of other tomato-based products, including spaghetti sauce, barbecue sauce, and, of course, ketchup.
Today Hunt's is one brand of many belonging to packaged and frozen foods giant ConAgra Foods Inc. (NYSE: CAG) ranging from Healthy Choice to Slim Jims, from Orville Redenbacher to Egg Beaters. ConAgra reported $12 billion in sales last year.
ConAgra (NYSE: CAG) is recently trading at $23 in pre-open trading, above its close of $21.89.
CAG reported Q3 diluted EPS of 63 cents. CAG reaffirmed long-term EPS view of 8-10%. CAG agreed to sell its commodity trading and merchandising operations to Ospraire Special Opportunities fund for approximately $2.1 billion.
CAG April option implied volatility of 51 is above its 26-week average of 27 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
With the markets in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio. And with the above in mind ConAgra is worth an evaluation.
ConAgra (NYSE: CAG) is one of the largest food companies in North America.
Analysts see moderate revenue growth for ConAgra in F2008, with large profits from its trading and merchandising businesses. CAG's food / ingredients unit should also register a solid increase in earnings.
Meanwhile, CAG's consumer foods line should perform adequately in F2008: analysts had originally expected the unit to record lower profits, but there are abundant signs that that will not be the case. The Reuters F2008/F2009 EPS consensus estimates for CAG are $1.59/$1.63.
Update: Yesterday's (10-17-07) Wall Street Journal (subscription) article about this investigation began "Prominent American food companies are under scrutiny in a federal probe of possible fraud and corruption in the military's food-supply operations for the Iraq war", and went on to read "The inquiry is focused on whether the food companies set excessively high prices when they sold their goods to the Army's primary food contractor for the war zone." Today's (8-18-07) WSJ article about the investigation reported a very different slant to the story, suggesting that, rather than pursuing American producers, the government was investigating the wholesaler and companies involved in the Kuwait end. Given this change, I find the story I have written below no longer substantiated, and caution readers to wait along with me for more reliable information.
In accordance with our policy of owning up to what we have written, the post will remain.
A number of American food companies including Sara Lee (NYSE:SLE), ConAgra (NYSE: CAG) and Perdue Farms Inc. have come under suspicion of conspiring with Kuwait-based Agility Corp., a logistics supplier for the U.S. troops in Iraq, to inflate food supply costs. In June, Agility received a new, one-year, $2.8 billion contract to provide life support (billeting, motor pool, dining and medical support services) to troops in Iraq. Agility, until recently known as Public Warehousing, has enjoyed a series of support contracts throughout much of the Iraq conflict.
According to Reuters, the Defense and Justice Departments are investigating allegations that Agility may have taken kickbacks from its suppliers, as well as charging the U.S. military unreasonably high prices for provender.
Agility, founded in 1979, was taken public in 1997 and is traded on the Kuwait exchange. It employs over 20,000 people in over 100 countries, with an annual revenue of $4.5 billion. In June, it was also awarded a $43.6 million contract for base operations and maintenance services at U.S. Air Force bases in Spain.
Update: ConAgra has put out a press release claiming that the DOD is looking to them as witnesses, rather than perpetrators.
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.
Sidney-based Cabela's was founded in 1961 and went public in 2004. Cabela's is considered a buy by the consensus of analysts surveyed by Thomson Financial, but a closer look shows that they are split between strong buy and hold. The share price reached a 52-week high of $28.80 in early August after Cabela's second quarter results beat Wall Street expectations. The price was $23.91at the close on Wednesday. The Motley Fool points to tough same-store sales and insider trading as reasons for Cabela's "sophomore slump." In other words, high expectations from the IPO have worn off and its time to consider buying. In addition, Motley Fool, like Consumer Reports before it, likes Cabela's VISA credit card. Cabela's was also recently included on S&P Small Cap 600 index, and it made the 2007 Forbes list of 100 best mid cap stocks. Cabela's will release third quarter results on November 1.
The Associated Press reports that America's largest popcorn maker, ConAgra Foods (NYSE: CAG), has been poisoning the lungs of its popcorn plant workers and will take its time solving the problem. Specifically, ConAgra will change the recipe for its Orville Redenbacher and Act II brands over the next year to remove the flavoring chemical diacetyl, linked to a lung ailment in popcorn plant workers.
The decision comes a day after a doctor at a leading lung research hospital said in a warning letter to federal regulators that consumers, not just factory workers, may be in danger from fumes from buttery flavoring in microwave popcorn.
The timing of this decision suggests that ConAgra has no problem poisoning its workers. But it seems to care a bit more about poisoning its customers. After all, if all its customers get lung disease and die, who will pay for the popcorn? I guess ConAgra feels comfortable that its employees can always be replaced.
I wonder whether ConAgra is concerned that its employees will sue the company for unsafe working conditions? Or will microwave popcorn eaters will rise up and sue ConAgra for lung poisoning? Meanwhile ConAgra's planned slow pace of replacing the flavoring chemical guarantees that I will keep its products out of my kitchen for a long, long time.
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?
MOST NOTEWORTHY: Today's noteworthy upgrades include ConAgra Foods, Inc (CAG), Dell Inc (DELL), Ryland Group, Inc (RYL) and Volterra Semiconductor Corp (VLTR).
Prudential upgraded shares of ConAgra Foods Inc (NYSE: CAG) to Neutral from Underweight with a $26 target on valuation.
Pacific Crest upgraded shares of Dell Inc (NASDAQ: DELL) to Outperform from Sector Perform as the firm believes new management, new products and supply chain cost realignments could boost operating margins.
Ryland Group, Inc (NYSE: RYL) was upgraded to Neutral from Underperform at Credit Suisse.
Unterberg upgraded shares of Volterra Semiconductor (NASDAQ: VLTR) to Market Perform from Underperform on valuation.
OTHER UPGRADES:
Friedman Billings upgraded Peabody Energy Corp (NYSE: BTU) to Outperform from Market Perform based on lack of CAPP exposure, growth profile, rising international demand and certain benefits from the scrubber trend.
JP Morgan upgraded shares of Cincinnati Bell Inc (NYSE: CBB) to Overweight from Neutral, as the firm believes higher capex is reflected in the valuation and FCF should recover in 2008.
Brean Murray has increased confidence in the success of Isle of Capri Casinos' (NASDAQ: ISLE) Isle casino, soon to open at Pompapno Park, and the considerable option value that should be embedded in shares related to a Florida gaming bill which would loosen restrictions on gaming at pari-mutual facilities. The firm upgraded shares to Buy from Hold on the news.
Deutsche Bank upgraded shares of Pogo Producing Co (NYSE: PPP) to Hold from Sell to reflect the likelihood of corporate action over the near term, most likely the sale of the company in whole or in parts.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
This post is part of our 
ConAgra
With the markets in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio. And with the above in mind ConAgra is worth an evaluation.
Update: 
The Associated Press reports that America's largest popcorn maker, 
Peanut butter manufactured under the "Peter Pan" and "Great Value" brands with the product code 2111 by 
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