For his second Executive Decision segment of "Mad Money" Wednesday, Jim Cramer spoke with Ken Romanzi, president and CEO of B&G Foods Inc. (BGS) , a packaged foods maker that saw sales surge 57% during the pandemic.
Romanzi said B&G's portfolio of brands has done well during the pandemic, but that consumers aren't just stocking up on their products, consumption is up as well. He expects these trends to continue as people stay at home more and eat out a little less than they did before.
B&G has been innovating with new products, line extensions and cross promotions, Romanzi added, and it has a long pipeline of new products on the way.
When asked about the company's business model, Romanzi said B&G remains a serial acquirer of great brands that it revitalizes to produce cash flows for its shareholders.
We last looked at BGS last Sept. 10 and wrote at that time, "BGS could make a technical bounce, but with the trend still bearish this is not a compelling trade." Let's check out the latest charts and indicators.
In this daily bar chart of BGS, below, we can see that prices trended lower from September to the middle of March of this year. Prices have doubled in the past three months and the indicators have turned positive. BGS is above the rising 50-day moving average line and the rising 200-day moving average line. In early May the 50-day line moved above the 200-day line for a bullish golden cross signal. The On-Balance-Volume (OBV) line has been rising since late February, telling us that buyers of BGS have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early March but is currently in a take profits posture.
In this weekly bar chart of BGS, below, we can see that prices finally broke the downtrend of the past three years. Prices are now trading above the rising 40-week moving average line. The weekly OBV line has been moving up from February, which is very encouraging. The MACD oscillator is now strongly above the zero line for an outright buy signal.
In this first Point and Figure chart of BGS, below, we used daily price data and we can see a nearby price target of $31.
In this second Point and Figure chart of BGS, below, we used weekly close-only price data to construct the chart. Here we can see a potential longer-term price target of $44-$45 projected.
Bottom line strategy: A lot has changed since last September. BGS could experience a sideways trading range between $22 and $26 for a number of weeks before trying to resume its advance. Traders should look to buy weakness, risking a close below $21. The potential price targets in the months ahead are $31 and $44.
