Pilgrim's Pride Corporation
), a meat products company, scaled a new 52-week high of $30.30 on
Jul 10. This marks a nominal increase from the previous high of
$29.95 hit a day earlier.
Pilgrim's Pride closed yesterday's trading session at $30.03,
reflecting a solid year to date return of 88.3%. An average
quarterly surprise of 16.9% for the trailing 12-month period
indicates further upside potential for the company.
Pilgrim's Pride has been gaining a growth momentum since the
announcement of its plans to acquire peer firm
The Hillshire Brands Company
). However, the proposed $7.7 billion acquisition was revoked later
as Pilgrim's Pride lost the race to
Tyson Foods, Inc.
). But notwithstanding the final outcome, the proposal to
acquire such a big-ticket player increases shareholders' confidence
on the stock.
The company is currently experiencing a hike in the demand for
chicken products, especially tenders, small whole chickens and
boneless, skinless breast portions. Moreover, boneless dark meat
consumption has grown in the U.S. over the past year. Additionally,
as the industry is facing low supply and high demand issue, the
prices of most of the chicken products are on a rise.
Exiting first-quarter 2014, Pilgrim's Pride had a significant
cash balance of $515 million. The company has been recording
substantial hikes in earnings over the past quarters. Earnings came
in at 38 cents per share, soaring 81% year over year backed by
lower cost of sales in the quarter.
In the past seven days, the Zacks Consensus Estimate for
earnings increased 9.8% to 67 cents per share for second quarter of
2014, while it increased 6.8% for the full year to $2.05.
Other Stocks to Consider
With a market capitalization of $7.8 billion, Pilgrim's Pride
sports a Zacks Rank #1 (Strong Buy). Another stock worth
considering in the industry is
Sanderson Farms, Inc.
), sporting the same rank as Pilgrim's Pride.
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TYSON FOODS A (TSN): Free Stock Analysis Report
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PILGRIMS PRIDE (PPC): Free Stock Analysis
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