Shares of The J.M. Smucker Co. ( SJM ) hit a new 52-week
high of $101.11 on Apr 12 and eventually closed at $101.10. Shares
of this food and beverage company have been gaining momentum since
it reported solid fiscal third quarter results on Feb 15. Smucker
also slashed its packaged coffee prices on Feb 19, which further
boosted the share price.
In fact, the stock has set new 52-week highs thrice i.e. on Feb
27, Mar 8 and Mar 28 since the announcement of its third quarter
Year-to-date, share prices have recorded a healthy return of
13.4%. The company's long-term estimated EPS growth rate is 8.70%.
Average volume of shares traded over the last three months came in
at approximately 520K.
Solid Third Quarter Performance
Smucker posted strong fiscal third quarter results beating the
Zacks Consensus Estimate for both revenues and earnings. The
company's continued focus on its brands through innovations and
promotional offerings, strategic acquisitions, improving volumes of
K-cups, and effective utilization of cash through buybacks drove
The company's earnings of $1.47 per share jumped approximately
20% year over year in the third quarter, primarily driven by
increased sales growth and lower share count due to share buybacks.
Net sales growth of 6% was driven by favorable sales mix and
benefits from the acquisition of Sara Lee Corporation's North
American foodservice coffee and hot beverage business in January
last year. Volume gains in the higher priced K-Cups coffee brand
and peanut butter business also fueled growth.
In addition, the company managed to offset higher peanut costs
in the quarter by acquisition gains, favorable sales mix and lower
green coffee costs. This was also reflected in higher gross and
operating margins in the third quarter.
Smucker also raised the lower end of its adjusted earnings
guidance to a range of $5.17 to $5.22 per share from 5.12 to $5.22
per share announced previously. The company had already increased
its fiscal 2013 earnings guidance in the first and second quarters
as well, reflecting its attractive earnings potential.
Slashed Coffee Prices
Following its third quarter earnings, Smucker slashed the list
prices by an average 6% for its flagship brand Folgers, its
licensed brand Dunkin' Donuts and majority of its packaged coffee
products sold in the U.S. The company has cut its prices for the
third time since year 2011 in response to a decline in green coffee
Other Stocks to Consider
Stocks in the food industry that are portraying strong upward
trend in the bourses are Flower Foods Inc ( FLO ), ConAgra
Foods Inc ( CAG ) and
General Mills Inc ( GIS ). While Flower
Foods carries a Zacks Rank #1 (Strong Buy), ConAgra and General
Mills hold a Zacks Rank #2 (Buy).CONAGRA FOODS (CAG): Free Stock Analysis ReportFLOWERS FOODS (FLO): Free Stock Analysis ReportGENL MILLS (GIS): Free Stock Analysis ReportSMUCKER JM (SJM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment