Lost My Taste for ConAgra

 | Jun 18, 2014 | 12:10 PM EDT
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Holy cow, ConAgra (CAG), this is the real world.

When you are running a company with second-rate brands mixed in with store-label knock-off merchandise, you are driving a truck load of TNT through a bumpy tote road in the jungle.

That's ConAgra to a "T." It looks a bit like Hillshire Brands (HSH), a series of second-rate brands under one roof. It's combination of Reddi-wip, Hunt's, Swiss Miss, Pam, Egg Beaters, Healthy Choice, Parkay, Gulden's and Chef Boyardee -- a hit list of all the products that people have stopped buying because of the headlong rush to organic natural and fresh.

I remember when Healthy Choice was a healthier choice. I recall when Chef Boyardee was state-of-the-art Italian. I can recall when we had to buy Parkay because it was the only non-butter game in town. Swiss Miss, Reddi-wip -- these just seem part of the old pantry in a nation that is de-pantrying.

So what did ConAgra do? It went and overpaid for a company that makes private-label foods. I have no idea what the company was really worth, but it wasn't worth the price ConAgra paid.

Now shareholders are stuck with a no-growth company that seems to have lost its way, isn't putting itself up for sale, isn't splitting up and isn't announcing management changes. And it isn't boosting the dividend (lucky to keep it). In other words, it's an earnings-per-share story without any earnings-per-share growth. It's a least-own situation.

It is also a reminder that we are in an earnings lull and not everyone is doing that well. But we also had terrific numbers at Adobe (ADBE) and FedEx (FDX), so I guess two out of three ain't bad.

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