I’ll go into the reasons in a moment. I don’t know about you but I am eating a lot more chicken. Many of my friends are eating less red meat and those that haven’t gone over to the dark side and become total vegetarians are restricting themselves to fish and chicken. Having been raised in the south I like chicken just about any way you can fix it: grilled, fried, baked, but I still like it with the skin on — I’m not totally nuts yet.

Tyson Foods, Inc. is an integrated producer, processor and marketer of chicken and poultry-based food products. Tyson supplies chicken products through food service, retail grocery stores, club stores and international distribution channels. The core business is chicken in the United States; but they also make corn and flour tortillas under the Mexican Original brand and through its subsidiary Cobb Vantress, a chicken breeding stock supplier. If you haven’t heard of the brand you don’t eat chicken.

The stock is on my list because it has hit new highs in 12 of the last trading sessions and is 5 for 5 recently. The stock had a 22.45% price appreciation in the last 30 days and has 13 of 13 buy signals on Barchart’s technical indicators for a 100% buy rating.

Of the 13 analysts following the stock 11 have revised their next years EPS estimates in the last 7 days. The consensus is for a 4.2% revenue growth next year coupled with a 5.1% increase in earning per share. They estimate a 8.5% compounded EPS growth for the next 5 years. Brokerage analysts give the stock 6 buy and 7 hold recommendations.

Short interest has also been decreasing from a high of 14 million shares last year down to 9 million at the end of January.

Just to double check my research I went over on Motley Fool and the CAPS members think the stock will outperform the market by a vote of 191 to 72 with the All Stars in agreement 55 to 15.

This is what I look for in a stock:

• The stock is having price appreciation in more than 50% of the recent trading sessions
• There is interest on Wall Street and the analysts are predicting increasing revenue and earnings
• Some other sites following the stock are not betting against it

Tyson Foods (TSN) might make a good addition to your portfolio. First research it yourself and see if it fits the rules you’ve set for yourself on risk and diversification. As always put in a stop loss at either a percentage drop or a daily moving average and monitor your portfolio on a regular basis.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com.

Disclosure: no position at the time of publication

View original at: Financial Tides — A Stock Market Investing Newsletter by Jim Van Meerten

(TSN) Don’t Be Chicken to Buy Tyson

Revenue for the quarter increased marginally by 1.7% year-over-year to $6.6 billion. Higher revenues in Tyson’s Chicken and Beef divisions were offset by revenue declines in the Pork and Prepared Food segments.

Sales in the Chicken segment came in 8.6% higher than the prior-year quarter, reflecting strong volumes and higher average sales prices. The segment gained from its recent acquisitions and inventory reduction efforts.

Tyson’s Beef division witnessed sales growth of 1% during the quarter. Lower average selling prices were more than offset by higher volumes in this business. Pork and Prepared Foods segments reported sales declines of 7% and 4% respectively, as volume gains in these segments could not fully offset the impact of lower average sales prices.

Total debt as on January 2, 2010 was $1.9 billion, which was down $400 million compared to the end of fiscal 2009. At the end of the quarter, the company had cash and cash equivalents of $1.3 billion.

Tyson expects fiscal 2010 to be a better year than fiscal 2009, helped by strong operating performance at its Beef, Pork and Prepared Foods divisions. Also, the company is making operational improvements to maximize margins at its Chicken division.

Zacks Investment Research

(TSN) Tyson Foods Beats Consensus Estimates

Hormel has strengthened its position through acquisitions, which is expected to be its fundamental growth strategy in the future. Given the company’s strong balance sheet and management’s track record of successful acquisition and integration of businesses over the years, we expect acquisitions to play a key role in its growth.

Acquisitions pose several potential risks for Hormel. Nevertheless, plans to increase spending on advertising would definitely help maintain and grow its market share in the future. We are confident about Hormel being able to restore top-line growth on an annualized basis in fiscal 2010, over and above the revenue gains that are expected to continue in the future.

Although the food market is highly competitive, a greater share of value-added branded products in Hormel’s product mix will help strengthen its margins and reduce exposure to commodity prices in the long term. The most promising in this respect is the company’s efforts in its meat business, part of its Refrigerated Foods segment.

The greater retail penetration of Hormel’s meat-branding activities, commenced in the 1996/97 period, hold a significant growth potential. However, the production and sale of meat and food products is highly competitive.

Recently, Hormel reported better-than-expected results for the fourth quarter and full year fiscal 2009. For full year 2009, net earnings were $342.8 million versus $285.5 million in 2008. Earnings per share (EPS) were $2.53 compared to $2.08 in 2008. Management expects full year fiscal 2010 EPS in the range of $2.63 to $2.73.

Zacks Investment Research

(HRL) Hormel Foods Corporation Coverage Initiated at Neutral

The Country Crock chilled side dish line consists of 10 varieties of refrigerated, microwaveable, multi-portion, potato-/pasta-based side dish products. The line, first introduced in 2004, is a strong player in the refrigerated side dish segment.

Although, Hormel’s strategy to grow through acquisitions carries several potential risks, it is well positioned for acquisitions to strengthen its growth profile. Given the company’s strong balance sheet and management’s track record of successful acquisitions integrated over the years, we expect acquisitions to play a key role in the company’s growth.

The Country Crock acquisition will help Hormel Foods advance its participation in the growing segments of convenient meals and side dishes. Hormel Foods currently manufactures and sells microwaveable main dishes including Hormel refrigerated entrees and Lloyd’s prepared entrees, consisting primarily of meat or poultry.

Hormel Foods is a leading manufacturer and marketer of various meat and food products. The company’s plans to increase spending on advertising would definitely help maintain and grow its market share. Although the food market is highly competitive, a greater share of value-added branded products in Hormel’s product mix will help strengthen its margins and reduce exposure to commodity prices in the long term. Thus, we maintain our Neutral recommendation on the stock.

Zacks Investment Research

(HRL) Hormel Foods Acquires Country Crock From Unilever

The pork producer has received cash subsidies from the Chinese government to aid in the expansion, including $3.1 million to construct the Tianjin plant which will produce chilled and frozen pork. The Tianjin plant is expected to open in January 2010.

Zhongpin has surprised on estimates 3 out of the last 4 quarters by an average of 9.44%. On Nov 9, the company saw record results for the third quarter. It surprised on the Zacks Consensus Estimate by 15.79% as earnings were 44 cents compared to the Zacks Consensus of 38 cents.

Revenue rose 26.7% to $194.9 million from $153.8 million in the year ago quarter as hog prices trended higher in July and August and then held the higher levels in September.

Zhongpin was cautious about its guidance for the remainder of 2009 as the company didn’t believe pork prices would rise further in the fourth quarter. Analysts have lowered the 2009 Zacks Consensus Estimate in the last 60 days to $1.50 from $1.51 per share. They still expect growth in 2010, however, of 16.93%.

Value Fundamentals

Zhongpin is now a Zacks #2 Rank (buy) stock. It is still cheap, with a forward P/E of just 9.6 and a price-to-book ratio of only 1.87. Zhongpin also sports a 1-year return on equity of 21.03%, which is much higher than the industry average of 11.08%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

Zacks Investment Research

(HOGS) Zhongpin Incorporated – Government Subsidies to Aide Expansion

Company Description

Balchem operates in 3 segments; ARC Specialty Products; Food, Pharma and Nutrition; and Animal Nutrition and Health. The specialty products included chemicals for healthcare and other industries. Its Food, Pharma and Nutrition group works on micro-encapsulated, granulated and other applications for food and pharmaceuticals. The Animal Nutrition and Health segment makes products for various animal related markets.

EPS Up 44%

Belchem released quarterly results on Oct 29th that included net earnings of $6.9 million, up $2.1 million. This led to earnings per share of 36 cents, a 44% jump since last year.

Sales dipped about 7% on a year-over-year basis, but quarterly growth was 2.5%.

Estimates Climbing

Both covering analysts submitting estimates to Zacks raised their full-year targets for 2009 and 2010. The Zacks Consensus Estimate is for this year is now $1.34, up 8 cents.

Next year’s projections average $1.53, up 6 cents. These levels represent year-over-year growth of 34% and 14%. This summer Belchem was ranked #62 on Forbes’ list of the fastest growing companies for 2009.

Industry Comparison

Belchem has great metrics, especially relative to its industry averages. The company carries virtually no debt and has an ROE of over 19%, more than twice the average. Its net profit margin is currently 11.5%, about 5 times the norm for its peers.

The Chart

BCPC continue to soar, setting new 52-week highs almost daily. Take a look at the chart below.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

(BCPC) Belchem Corporation – Earnings Per Share Up 44%

The annual dividend was raised 10.5% to 84 cents from 76 cents per share in 2009.

On Nov 24, Hormel also surprised on the fourth quarter Zacks Consensus Estimate by 13.24%. Earnings per share rose 54% to 77 cents from 50 cents in the year ago period. The Zacks Consensus called for 68 cents. For fiscal 2009, earnings per share climbed 22% to $2.53 from $2.08 per share.

Sales and volumes both declined, however. Sales fell 10% to $1.68 billion while volumes sank 3% compared to a year ago. The sales decline was due to lower commodity costs which was reflected in lower pricing in the pork and turkey segments as well as a continued weak consumer environment.

On the positive side, the refrigerated foods segment led the quarter as volumes rose 1%.

Outlook for Fiscal 2010

The company provided a 2010 outlook of earnings per share in the range of $2.63 to $2.73.

The analysts are still revising their estimates but the full year Zacks Consensus has already jumped 4 cents to $2.63, which is at the lower end of the company’s guidance range. 3 out of 10 covering analysts raised estimates in the last week.

Value Fundamentals

Hormel is now a Zacks #2 Rank (buy) stock. It is trading with a forward P/E of 14.5. Its price-to-book ratio is 2.36. The company has a solid 1-year return on equity (ROE) of 14.73%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

Zacks Investment Research

(HRL) Hormel Foods Corporation – Annual Dividend was Raised 10.5%

During the fourth quarter of 2009, the company reported EPS of 77 cents, up 54% from 50 cents per share in the same quarter of 2008. It was also above the Zacks Consensus Estimate of 52 cents per share. However, revenues decreased 10% year over year and reached $1.68 billion. Volume was also down 3% from the fourth quarter of 2008.

Part of this substantial decrease is attributable to the planned reduction of turkeys at Jennie-O Turkey Store segment, decreased sales revenue due to lower commodity prices in pork and turkey complexes, greater promotional spending, continuing weak food service sales environment, the loss of Carapelli Olive Oil sales and some additional intentional product rationalization.

Grocery Products operating profit was up 12% year over year; while volume and revenue was down 7% and 12% respectively. Refrigerated Foods operating profit was up 23%; volume was up 1%, however sales was down 9%. Jennie-O Turkey Store operating profit was up 6%, while volume was down 6% and sales was down 10%. Specialty Foods operating profit was up 9%, volume was down 8% and sales were down 12%.

During full year of fiscal 2009, EPS of $2.53 was up 22% from $2.08 per share in 2008. Revenue of $6.53 billion was down 3% from 2008. Overall volume was down 3%. Grocery Products operating profit was up 9% from 2008, while volume was down 3% and sales were down 2%. Refrigerated Foods operating profit was up 7%. However, volume was down 1% and revenue was down 2%. Jennie-O Turkey Store operating profit was up 11%, while both volume and sales were was down 3%. Specialty Foods operating profit was down 2%, volume was down 12% and sales were down 11%.

Having returned to more normal earnings growth levels this year, management is confident in its ability to continue to enhance the bottom line. The company intends to tackle the challenge of a continued weak economy and reduced consumer spending, and expect to restore top-line growth on an annualized basis in 2010. Thus, the company expects EPS to be in the range of $2.63 to $2.73 in the fiscal 2010 up from a previous view of $2.60 to $2.70. The company also said it now expects to make $1 billion in operating cash flow for the year, versus a prior expectation of $850 million to $900 million.

Zacks Investment Research

(HRL) Hormel Foods Corporation Earnings Rise 54%

Excluding the one-time charge, quarterly earnings were 28 cents per share, compared to the Zacks Consensus Estimate of 26 cents and prior-year earnings of 13 cents per share.

Revenue for the quarter was flat year-over-year at $7.2 billion. Higher revenues in Tyson’s Chicken and Prepared Food divisions were offset by revenue declines in the Beef and Pork segments.

Sales in the Chicken segment came in 11% higher than the prior-year quarter, reflecting strong volumes and higher average sales price. The segment gained from its recent acquisitions and inventory reduction efforts.

Beef and Pork segments reported sales declines of 4% and 14% respectively, as volume gains in these segments could not fully offset the impact of lower average sales prices.

Tyson’s Prepared Foods division witnessed sales growth of 2% during the quarter. Lower average selling prices were more than offset by higher volumes in this business.

For the full year, Tyson posted earnings of 6 cents per share (excluding goodwill impairment charge), compared to fiscal 2008 earnings of 24 cents per share. Annual revenue of $26.7 billion was down by less than 1% compared to last year. The company witnessed higher volumes in all its divisions. However, lower average selling prices offset the volume gains for the fiscal year.

Tyson expects fiscal 2010 to be a better year than fiscal 2009, helped by strong operating performance at its Beef, Pork and Prepared Foods divisions. Also, the company is making operational improvements to maximize margins at its Chicken division.

Zacks Investment Research

(TSN) Tyson Foods’ Earnings Top Expectations

Company Description

Zhongpin produces and processes pork, vegetables, and fruit products in China. The company had developed refrigeration systems that allow delivery to rural areas as well as Europe.

Increasing Revenue

On Aug 10 Zhongpin reported solid second-quarter results that included an 18% increase in revenue, to $1662 million. Net income also grew, this time 26% to $10.7 million, or 36 cents per share.

With adjustments the earnings per share were 34 cents, a penny lower than the Zacks Consensus Estimate. Despite the miss, estimates are rising.

Bullish Revisions

Over the past 3 months the Zacks Consensus Estimate for full-year 2009 is up 4 cents, to $1.58. Next year’s estimates are averaging $1.95, up a dime over that period.

Given these forecasts, analysts are expecting growth rates of 33.5% and 23.5%, respectively.

Trading at a Discount?

Shares of HOGS are trading at incredible valuations. The P/E is 11 times and is just 9 times the forward estimates. Zhongpin is dominating its industry when it comes to ROE and margins.

The top rated meat producer currently generates and ROE of nearly 20%, almost double the 11% its peers are averaging. Zhongpin’s net profit margin is 5.9%, 10 times the industry norm.

The Chart

Zhongpin’s shares are surging on increased volume as the next report date, Nov 9, approaches. The stock is hitting its all-time highs but has plenty of momentum. Take a look at the chart below.

Zacks Investment Research
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(HOGS) Zhongpin Inc. – Trading at a Discount? – ROE of 20%, Almost Double Industry Average

Despite controlled production, the company reported a loss primarily due to higher one-time items and lower hog prices domestically due to oversupply, the impact of the H1N1 (commonly referred to as “swine flu”) pandemic and the recession.

Net sales for the quarter declined 13.6% year-over-year to $2.7 billion attributable to lower volumes and currency fluctuations, especially in international operations and lower prices of fresh pork. Furthermore, the recent outbreak of swine flu also had a negative impact on the top line.

Segment wise, Fresh Pork reported lower volumes, and average unit selling prices due to reduced exports and a marginal drop in domestic foodservice demand attributable to the recession.

In the Packaged Meats segment, the company posted strong profits driven by pricing and rationalization of unprofitable business. Further, the segment also benefited from permanent improvements in operating efficiencies and plant utilization, as well as reduced raw material costs.

The International segment’s profits grew, driven by the company’s meat processing operations in Poland and Romania. These operations were profitable despite relatively high raw material costs. In addition, sales volume in these two countries improved a combined 10% year-over-year.

The Hog Production segment continued to post losses in the quarter, despite cost reduction initiatives. The segment was further affected by a decrease in live hog market prices year-over-year due to  oversupply.

In addition, the current quarter’s loss also includes non-cash impairment charge of $34.1 million related to the write-down of farm assets of non-core hog operations. Moreover, the company reduced the size of its U.S. sow herd by 10% in response to overall industry conditions and to modestly reduce its exposure in the live production business.

The Other segment benefited from production cutbacks and lower grain prices, both of which had a positive impact on the business. Smithfield sold all its remaining cattle during the quarter, and exited from the business. The sell-off of the cattle increased the segment’s sales year-over-year.

Based on the results of the first quarter, the company provided an outlook for fiscal 2010.  Management states that the hog production industry will continue to incur losses until an industry-wide liquidation happens. Since current live hog market prices are significantly below raising costs for the foreseeable future, Smithfield believes that the industry has reached an inflection point where liquidation must occur.

Therefore, in response to the industry dynamics, the company has altered its hog production strategy by modestly reducing its exposure to hog and grain markets through sow reductions and farm closings.

However, the packaged meats business is expected to continue to churn profits. Further, after the company completes its Pork Group restructuring, it expects incremental improvement in packaged meats profits of approximately $80 million annually by fiscal 2011.

Zacks Investment Research
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(SFD) Smithfield Foods Looses More Than Double the Prior-Year Same Quarter

Earnings per share were 57 cents compared to the Zacks Consensus Estimate of 52 cents and were 50% higher than EPS in the second quarter of a year ago.

Sales and volumes both decreased, however. Sales declined 6% to $1.57 billion.

The company continues to see strong sales of SPAM, HORMEL chili and HERDEZ products as consumers eat at home and seek out value in doing so. Sales of microwavable products were soft, however.

Hormel Re-Affirmed 2009 Guidance

The company was boosted by its strong third quarter results and re-affirmed its full year guidance of $2.36 to $2.42 per share.

Analysts scrambled to raise estimates to be in line with the company’s guidance. 6 out of 8 analysts raised for the fourth quarter as the Zacks Consensus Estimate rose 3 cents to 68 cents in the last month.

The full-year Zacks Consensus Estimate jumped 6.1% to $2.43, which is a penny above the company’s forecast range.

Value Fundamentals

Hormel is much more expensive than when I last reviewed it on Apr 29. It was trading as 12x forward earnings and is now trading at 15.1x forward earnings. It’s on the cusp of being too expensive to be a value stock.

Its price-to-book ratio is firmly in the value camp, however, at 2.27. The company also has a solid 1-year return on equity (ROE) of 14.73%. It is a Zacks #2 Rank (buy) stock.

Hormel also continues to pay a dividend, having rewarded shareholders an impressive 324 consecutive quarters. The stock has a yield of 2.10%.

Zacks Investment Research
View original at: Zacks.com News Feed

(HRL) Hormel Foods Corporation Earnings up 50% Quater Over Quarter

Net sales for the quarter declined 6.2% year-over-year to $1.57 billion due to declines across all operating segments—Grocery Products 6.2%, Refrigerated Products 4.9%, Jennie-O Turkey Store 4.9%, Specialty Foods 12.9% and Others 10.4%. Overall volumes declined 4% year-over-year.

Grocery Products revenues declined 6%, while volume was down 8%, as strong sales of the SPAM family of products, HORMEL chili and HERDEZ products were more than offset by the negative impact of soft sales of the microwaveable products. Further, sales of the recently discontinued Carapelli joint venture products also impacted the top line.

Refrigerated Foods segment posted a 4.9% decline in sales and volume was down 1%. Sales of the retail value-added offerings such as HORMEL Pepperoni, Party Trays and the DiLusso Deli Company products were more than offset by the impact of a challenging pork environment. Moreover, foodservice sales continued to be soft, reflecting continued decline in restaurant traffic.

Total segment sales for Jennie-O Turkey Store declined 4.9% and volumes also declined 2% year-over-year, primarily due to higher feed costs. However, this was partially offset by reduced turkey production.

Specialty Foods sales were down 12.9%, due to mixed results within the segment.  However, sales of the Diamond Crystal Brands improved attributable to strong sales of nutritional products, but these results were fully offset by weak sales of ready-to-drink products at Century Foods International.

Sales decline of 10.4% reported by the Others segment, which primarily includes Hormel Foods International, was due to currency headwinds and difficult export markets.

Based on the performance in the third quarter, the company reiterated its annual earnings guidance. On August 10, 2009, Hormel had raised its guidance due to an improved performance by Jennie-O Turkey Store segment and the grocery products segment. Earnings for fiscal 2009 were raised to $2.36 – $2.42 per share compared to the earlier guidance of $2.15 – $2.25 per share.

Although Hormel faces challenges due to the sustained weak economy, a continued over supply of commodity turkey meat and difficult export markets, management still believes it can weather the storm through its balanced business model and strong portfolio of brands.

Zacks Investment Research
View original at: Zacks.com News Feed

(HRL) Hormel Reports Modest Results – 57 Cents which beat consensus of 50 cents

Company Description

Sanderson Farms, Inc. is an integrated poultry processing company that operates in the United States. The company was founded in 1947 and has a market cap of $966 million.

Second-Quarter Results

Sanderson Farms’ share price received a nice boost on May 28 when the company reported strong second-quarter results that were ahead of expectations.

Sales were down 2% from last year to $426.8 million, but income spiked, jumping to $26.2 million from $6.2 million last year. Earnings came in at $1.27 per share, well ahead of the consensus of 58 cents.

Lower Costs Drive Income

The company noted that lower costs of feed supplies drove its income growth, with prices of corn and soybean meal down 23% and 14% from last year respectively.

Sanderson also said the industry has scaled back on its production in order to constrict supplies and keep prices elevated.

Estimates Surge

Even before the solid quarter hit the Street, analyst were upgrading their earnings estimates. The current-year estimate is up $1.17 in the last 30 days to $3.52 per share. The next-year estimate is up to, pegged at $4.38, a robust 25% growth projection.

The Chart

Shares of SAFM have been rallying since bottoming out just above $20 in late November of last year. More recently, shares have surged back to within striking distance of the 52-week high on the good quarter. Take a look at the chart below.

Zacks Investment Research
View original at: Zacks.com News Feed

(SAFM) Sanderson Farms Inc. – Momentum – Zacks Rank Buy

Zhongpin distributes pork, pork products and fruits and vegetables in 20 Chinese provinces and 4 cities with special political status through over 3,097 retail outlets. The company also exports to the European Union and Southeast Asia.

4 Surprises in a Row

On May 11, Zhongpin reported first-quarter results which surprised on estimates by 10%. It was the 4th consecutive surprise in a row for the company. Net income was $9.7 million, or 33 cents per share, compared to $7.3 million, or 24 cents, in the year ago period. Analysts expected just 30 cents.

Revenue growth was fueled by demand for pork products as well as increased production capacity due to new facilities that were added in 2008.

Prepared meats were the strongest segment, jumping 83.3% to $22 million from $12 million a year ago. Chilled pork revenue climbed 56.9% while frozen pork grew 9.5%.

Fruits and vegetables are the smallest segment and accounted for just 1% of total revenue in the quarter. Revenue growth was flat compared to a year ago. However, a new production facility opened in April which will bring the total production up to 30,000 metric tons from 12,600 metric tons.

2009 Guidance Reaffirmed

In May, the company confirmed its 2009 EPS guidance in the range of $1.50 to $1.63 per share with revenue in the range of $780 million to $810 million.

Zhongpin doesn’t expect the fears surrounding the swine flu to have a big impact on the year.

“While the pork industry experienced a negative impact in April due to the recent H1N1 virus outbreak in North America, we believe this impact will be short-lived,” said Mr. Xianfu Zhu, CEO.

“In fact, as fears surrounding the virus have subsided and consumers are educated that the virus can not be contracted by consuming pork products, we have observed an increase in demand for pork and some firming of pork prices.”

“As a result, we do not expect further negative impact from this issue on our revenue for the second quarter,” he added.

Consensus Estimates Rise

Given the company’s reaffirmation of guidance, covering analysts have been raising estimates for the full year. Consensus estimates climbed by 6 cents to $1.55 per share to be within the forecast range. Analysts expect year-over-year earnings growth of 31.36%.

Value Fundamentals

Zhongpin is a Zacks #2 Rank (buy) stock. It continues to have solid value characteristics. HOGS trades with a price-to-book of 1.54. It has a PEG ratio of 0.23. The company also has a stellar 1-year return on equity (ROE) of 20.71%.

16.4% in the first quarter as shapewear remained hot. MFB is trading with a PEG ratio of 0.86.

Zacks Investment Research
View original at: Zacks.com News Feed

(HOGS) Zhongpin Inc. – Value – Zacks Rank Buy

Earnings per share for the quarter were 59 cents compared to 56 cents in the year ago period. Analysts expected only 50 cents. Sales were flat with the year ago period at $1.6 billion.

In the company’s Grocery Products segment, sales rose 4% due to strong sales of SPAM, Dinty Moore stews and Mexican products as consumers cooked more meals at home.

The Refrigerated Foods segment continued to struggle as sales were down 7% due to the spreads between hog costs and primal values.

However, the meat products business saw sales up double digits on the strength of Natural Choice lunch meats, Hormel party trays and Di Lusso Deli Company products. This was, again, a reflection of choices of consumers who are looking for value dining options.

Foodservice sales were soft in the quarter which reflected the overall economic conditions as consumers ate out less often.

2009 EPS Seen at High End of Forecast Range

Given the company’s strong first half of 2009, it is now forecasting EPS at the upper end of its prior guidance range of $2.15 to $2.25 per share.

2009 full-year consensus estimates are already at $2.25 but covering analysts have not yet updated estimates to include last week’s second-quarter results.

Value Fundamentals

Hormel Foods was a Zacks #1 Rank (strong buy) stock when I last reviewed it on Apr 29. It is now a Zacks #2 Rank (buy) stock. HRL has a forward P/E of 13.6. Its price-to-book is 2.21.

Hormel has now surprised on estimates 3 out of the last 4 quarters by an average of 13.27%. The company’s current dividend yield is 2.30%.

Zacks Investment Research
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(HRL) Hormel Foods Corporation – Value – Zacks Rank Buy

Company Description

Hormel Foods manufactures various food and meat products. The company, founded in 1891 in Minnesota, owns well-known consumer brands such as Jennie-O, SPAM, Hormel, and Dinty Moore.

Second-Quarter Results Scheduled for May 21

Hormel is scheduled to report second-quarter 2009 earnings on May 21. Second quarter consensus estimates are holding steady at 50 cents per share over the last 60 days.

Full-year estimates are up 3 cents in the last 90 days to $2.24 per share.

The full-year estimate is at the high end of the company’s guidance range of $2.15 to $2.25, which the company confirmed in mid-February.

History of Earnings Surprises

Hormel has a history of earnings surprises, having beaten on estimates 5 out of the last 6 quarters.

In February, the company surprised by 17.65% in the first quarter of 2009 and has averaged a 7.88% surprise in the last 4 quarters.

Dividend Payout Continues

On Mar 24, the company announced a regular quarterly dividend of 19 cents per share payable on May 15 to shareholders of record as of Apr 18.

It continues an impressive record of 323 quarterly dividends. Hormel has paid a dividend every year since the company was founded in 1928.

The company’s current dividend yield is 2.50%.

Value Fundamentals

Hormel Foods is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 12.12. The company’s price-to-book is 1.97. HRL has an outstanding 5-year return on equity (ROE) of 16.18%.

Zacks Investment Research
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(HRL) Hormel Foods Corporation – Value – Zacks Rank Buy

The company expects revenue in the range of $780 million to $810 million with strong revenue growth due to new markets and the company’s new frozen pork facility.

Full-year earnings are expected in the range of $1.50 to $1.63 per share. Analysts currently expect $1.49 per share.

However, the company, which has a global business that includes customers in Russia and the European Union, acknowledges the rough global economy.

“During the fourth quarter of 2008, demand for pork products declined as the worldwide economic slowdown began to impact the Chinese economy,” said Mr. Xianfu Zhu, CEO.

“Our growth strategy for 2009 is to achieve robust revenue growth by increasing our market share and improving our customer service. We plan to accomplish this by establishing additional regional sales and distribution centers, developing new products, and optimizing sales channels,” he added.

Value Fundamentals

Zhongpin is now a Zacks #2 Rank (buy) stock. The stock trades with a forward P/E of only 4.3. It has a PEG of 0.17.

The company is expected to report fourth-quarter and full-year 2008 earnings on Mar 17.

Zacks Investment Research
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(HOGS) Zhongpin Inc. – Value – Zacks Rank Buy

Company Description

Hormel Foods manufactures various food and meat products. The company, founded in 1891, owns well-known consumer brands such as Jennie-O, SPAM, Hormel, and Dinty Moore.

SPAM is Still King

On Feb 19, Hormel Foods reported first-quarter 2009 earnings that surprised on Wall Street estimates by 17.65%, or 9 cents a share. Earnings per share were 60 cents and analysts expected 51 cents.

Net earnings fell 8% to $81.4 million from $88.2 million in the year ago quarter. Sales rose to $1.69 billion from $1.62 billion in the first quarter of 2008.

The company is seeing changes in consumer behavior as more people eat at home. The Grocery Products segment, which includes canned meat items such as SPAM, Dinty Moore stews and Hormel chili, rose 6% year over year.

However, the Refrigerated Foods segment experienced a rough quarter. Pork operations posted a loss due to higher than expected hog costs and weaker then expected primal markets.

The segment also saw foodservice sales decline during the quarter which is the flip side of the Grocery Products segment. As more consumers ate at home, foodservice sales slowed as both business and personal travel declined.

2009 Guidance Confirmed

The company reaffirmed its 2009 guidance of $2.15 to $2.25 per share despite the turbulent economy.

Consensus Estimates Rise

Given the company’s 2009 guidance, covering analysts have been adjusting their estimates. For the second quarter, consensus estimates have fallen 1 cent to 50 cents in the last 7 days.

4 out of 8 covering analysts, however, raised 2009 full-year guidance by 2 cents in the last week to $2.23 per share, which is at the higher end of the company’s guidance range.

Value Fundamentals

Hormel Foods is a Zacks #1 Rank (strong buy) stock. It is trading at 13.4x forward earnings. HRL has a price-to-book of 2.16. The company also has an outstanding 5-year average return on equity (ROE) of 16.18%.

Hormel has been paying dividends for decades. On Feb 15, the company paid its 322nd consecutive quarterly dividend. The stock currently yields 2.40%.

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(HRL) Hormel Foods Corporation – Value – Zacks Rank Buy

Company Description

ZHONGPIN INC. is a U.S. publicly traded meat and food processing company that specializes in pork and pork products, and vegetable and fruits in the Peoples Republic of China. The Company is developing a nationally recognized high quality brand for meats and food products that encompasses a meaningful part of the everyday Chinese meals.

Zhongpin’s products include bacon and sausage for breakfast, sandwich meats for lunch, and fresh or chilled pork for dinner.

Estimates Rising

Full-year consensus estimates have been climbing in recent months and are now $1.19 for 2008 and $1.49 for 2009. Growth rates projected by these forecasts are 32% and 25%, respectively.

Shares are currently trading at good valuations with a P/E ratio of 10.7 times earnings.

Earnings Momentum

Zhongpin has reported 3consecutive earnings surprises. The company has beat Wall Street’s estimates by roughly 13% per announcement.

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(HOGS) Zhongpin – Shares are currently trading at good valuations with a P/E ratio of 10.7

Company Description

Zhongpin is a Chinese-based meat and food processing company that handles pork and pork products as well as fruits and vegetables. The company operates in 24 provinces in China through over 2,960 retail outlets and also exports to the European Union, Eastern Europe, Russia, Hong Kong, Japan and South Korea.

Zhongpin has been expanding production. On Nov 7, it announced that its new prepared meat facility in the Henan Province, which was just starting production, would increase annual production capacity for meat products, including sausage and ham, by 114%.

The new facility was built in Zhongpin’s existing industrial park which allows it to take advantage of existing logistics and infrastructure.

Revenue Surged 116% in the Third Quarter

On Nov 10, Zhongpin reported third-quarter earnings that surprised on Wall Street estimates by 13.33%. Net income rose 91% to $10.1 million, or 34 cents, from $5.3 million, or 23 cents per share in the year ago period. Analysts expected 30 cents per share.

Revenues jumped 116% to a record $153.8 million from $71.3 million in the third quarter of 2007. Sales from retail channels climbed 102% to $65.6 million from $32.5 million in the same period in 2007. Retail sales represent 43% of net sales.

The company added 35 new retail outlets during the quarter, including 7 showcase stores, 10 branded retail stores and 18 new supermarket counters.

Zhongpin Confirms 2008 Guidance

Zhongpin is still bullish about the rest of 2008 despite the slowing of the global economy. Pork consumption is expected to continue to grow in China’s rural and urban areas as consumers seek out high quality and safe food products.

he company also believes that China’s recent reforms to improve food safety in the rural areas should also provide it with further growth opportunities.

The company reaffirmed guidance of earnings per share in the range of $1.15 to $1.19 on revenues between $550 million to $570 million.

Consensus Estimates Rise

Given the company’s optimistic guidance, covering analysts have been raising estimates. Fourth-quarter estimates are up 2 cents to 32 cents in the last 30 days. Full-year consensus estimates rose 6 cents to $1.19 in the last month, which is the high end of the company’s guidance range.

Value Fundamentals

Zhongpin is a Zacks #1 Rank (strong buy) stock. It’s trading at 5.7x forward earnings. HOGS price-to-book is 1.27. The company has a strong 1-year return on equity (ROE) of 20.02%.

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(HOGS) Zhongpin Inc – Revenue Surged 116% in the Third Quarter