Sanderson Farms Touches a New 52-Week High - Analyst Blog

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Shares of Sanderson Farms, Inc. ( SAFM ), a meat products company, scaled a new 52-week high of $102.28 on Jul 11. This marks a nominal increase from the previous high of $101.17 hit a day earlier. 

Sanderson Farms closed the session at $102.01, reflecting a solid year-to-date return of 41.8%. The trading volume for the session was 427.2K shares. Upward revisions of the estimates for the coming quarters indicate further upside potential for the company.

Growth Drivers

With mergers and acquisitions on the rise, the meat products industry has lately been witnessing strong growth momentum. Such activities have enabled it to acquire a Zacks Industry Rank of 3 out of over 250 industries. From the growth perspective, hence, the meat products industry is quite well positioned, especially when compared to other segments out there.

Additionally, rising demand for poultry products is leading to higher prices for the same. Sanderson Farms experienced an increased demand for chicken products in fiscal second-quarter 2014 (ended Apr 30, 2014), primarily due to higher prices of competing proteins.

Post its fiscal second-quarter 2014 earnings announcement, the company has been witnessing upward estimates revision. In the past 60 days, the Zacks Consensus Estimate for third quarter of fiscal 2014 has increased 17.1% to $3.01, reflecting year-over-year growth of 2.2%. Also, the Zacks Consensus Estimate for fiscal 2014 grew 18.2% to $8.58, reflecting year-over-year growth of 51.1%, over the same time frame.

Other Stocks to Consider

With a market capitalization of $2.4 billion, Sanderson Farms sports a Zacks Rank #1 (Strong Buy). Other stocks worth considering in the industry include Pilgrim's Pride Corporation ( PPC ), The Hillshire Brands Company ( HSH ) and JBS S.A. ( JBSAY ). While Pilgrim's Pride sports the same rank as Sanderson Farms, The Hillshire Brands and JBS S.A. hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: SAFM , HSH , PPC , JBSAY

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