BGS

Publicly traded companies mentioned herein: B&G Foods Inc (BGS), Conagra Brands Inc (CAG), Walmart Inc (WMT)

Highlights

The presenter is short B&G Foods Inc (BGS), the center-of-store foods business that owns brands such as Green Giant, Ortega, Cream of Wheat, and Clabber Girl. In total they own ~50 brands. BGS experienced a huge COVID-19 benefit as consumers shifted to at home eating, and the presenter assumes this will create difficult comps as the economy opens up and people feel comfortable dining out again. While this observation may be obvious, he doesn’t think analysts have modeled the cost side appropriately, as freight rates are up and BGS’s service levels are very low, both of which could potentially impair the company’s earning power. BGS currently trades at a multiple similar to that of Conagra, and while he doesn't like Conagra, he argues that Conagra is a better business (both trade around ~14x earnings). From the current stock price he sees 20% downside for a price target of $21.50.