Lost My Taste for ConAgra

 | Jun 18, 2014 | 12:10 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

cag

,

hsh

,

adbe

,

fdx

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.

Columnist Conversations

GS has cleared the important hurdle on the way up which increases the odds for an eventual rally towards the 1...
A good quarterly report has sent shares of Calamos Asset Management (CLMS) sharply higher. CLMS was up about ...
Electronics distributor Ingram Micro (IM) reported better than 16% growth in its Q3 sending the stock up about...
Market posting decent day considering Ebola getting headlines again. Believe investors have learned not to pa...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.