Zacks Investment Research downgraded
Sanderson Farms, Inc.
) to a Zacks Rank #5 (Strong Sell) on Jan 14, 2014.
Why the Downgrade?
AMIRA NATURE FD (ANFI): Free Stock Analysis
HORMEL FOODS CP (HRL): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
WHITEWAVE FOODS (WWAV): Free Stock Analysis
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Sanderson Farms reported its fourth quarter and fiscal year 2013
(ended Oct 2013) results on Dec 17, 2013. Earnings per share in
the fourth quarter were $1.97, down 15.8% from the Zacks
Consensus Estimate of $2.34.
The company reported a 3.5% year-over-year increase in its
expenses. Cost of sales in the quarter increased 2.0% and
represented 86.0% of total revenue. Selling, general and
administrative expenses, at 4.2% of total revenue, grew 49.3%
year-over-year in the quarter. Income tax expense increased
significantly and stood at $26.0 million.
Spiraling expenses have affected Sanderson Farms' financials
adversely in fiscal 2013. Rising costs need to be controlled
before it delves a major blow to the company.
In the last 30 days, the Zacks Consensus Estimate for Sanderson
Farms has decreased 11.9% to $5.95 for fiscal 2014 (ending Oct
2014). This along with a negative average earnings surprise of
81.0% in the trailing four quarters raises our concern over the
company's performance in the quarters ahead.
Other Stocks to Consider
Sanderson Farms is a $1.7 billion integrated poultry processing
company. The company is engaged in the production, processing,
marketing and distribution of fresh and frozen chicken products.
Some better-ranked stocks in the industry include
Amira Nature Foods Ltd.
Hormel Foods Corp.
The WhiteWave Foods Co.
). All the three companies carry a Zacks Rank #2 (Buy).