Tyson Foods Inc
) reached a new 52-week high of $26.05 on Jul 1, 2013, after the
corn prices touched a record low since Oct 2010.
Shares of this meat processor recorded a healthy return of
40.4% on a 1-year basis and 30.4% on a year-to-date basis. The
company's long-term estimated EPS growth rate is 8.50%. Average
volume of shares traded over the last three months came in at
The price of corn, which is the main feed for chicken, slid
for an eighth session in a row following a record crop in the
U.S. Moreover, favorable climate has reduced the risk of yield
losses for the year. As per the U.S. Department of Agriculture
(USDA), harvest was highest since 1936.
USDA estimates a record harvest of 14.005 billion bushels this
year, up 30% from last year's drought-damaged crop. This is
expected to benefit Tyson as lower corn prices imply lower input
cost for Tyson.
Tyson is also geared to enrich its portfolio and has acquired
the California-based Circle Foods LLC last month. The acquisition
helped it to improve its Mexican cuisine,which is becoming
increasingly popular in the U.S. processed food industry.
At the investors' meet in May this year, Tyson announced that
the company will focus on innovation as an important part of
their growth strategy. It also plans a product launch for fiscal
Tyson expects to achieve top-line sales growth of 3% to 4%
every year. Value added sales are expected to grow within 6% to
8%, while international sales are expected to increase 12% to 16%
during fiscal 2013. The company also aims to maintain a
bottom-line growth of 10% every year.
Other Stocks to Consider
Currently, Tyson carries a Zacks Rank #3 (Hold). Other meat
producers in the industry that are worth considering
Sanderson Farms, Inc.
Pilgrim's Pride Corp.
). Both the companies hold a Zacks Rank #1 (Strong Buy). Another
company in the consumer staples sector that holds a Zacks Rank #1
(Strong Buy) is
Flower Foods Inc.
FLOWERS FOODS (FLO): Free Stock Analysis
PILGRIMS PRIDE (PPC): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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