HRL

Hormel Foods Corp

Consumer


Presented:06/27/2018
Price:$36.80
Cap:$19.52B
Current Price:$31.14
Cap:$17.08B

Presented

Date06/27/2018
Price$36.80
Market Cap$19.52B
Ent Value$20.35B
P/E Ratio21.03x
Book Value$9.97
Div Yield2.04%
Shares O/S530.51M
Ave Daily Vol2,650,093
Short Int12.19%

Current

Price$31.14
Market Cap$17.08B
Hormel Foods Corp. engages in the production of meat and food products. It operates business through the following segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold in the retail market. The Refrigerated Foods segment involves in the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice and fresh product customers. The Jennie-O Turkey Store segment include fresh ground turkey, rotisserie deli turkey products, nacho platters, turkey bacon, turkey burgers and other turkey products to consumers and foodservice operators. The Specialty Foods segment includes Omega-3 fish oils, stocks and broths, pasteurized processed cheeses and imitation blends, milk and whey proteins, dry milk powders, caseinates and isolates, meat ingredients, gelatin desserts, puddings, drinks, seasoning oils, sauces, and specialty fats. The International & Other segment includes the Hormel Foods International operating segment, which manufactures, markets, and sells company products internationally. The company was founded by George A. Hormel in 1891 and is headquartered in Austin, MN.

Publicly traded companies mentioned herein: Hormel Foods Corp (HRL), Tyson Foods Inc (TSN)

Highlights

The presenter is short shares of Hormel Foods Corp (HRL), viewing perceptions of HRL as the “last pocket of organic growth” within packaged foods as inaccurate. He believes HRL’s recent margin expansion to be a temporary phenomenon, driven by capacity shortages and inflated demand, and thinks HRL is set to see normalized margins soon. He models $1.40 in cycle average earnings per share and a 15x P/E multiple, for 35% - 40% downside from current levels.

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Idea Discussion

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