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The Zacks Analyst Blog Highlights: Calavo Growers, Fresh Del Monte and Archer Daniels Midland

For Immediate Release

Chicago, IL - January 06, 2017 - Stocks featured in this week's Zacks Industry Rank analysis include Calavo Growers (Nasdaq: CVGW - Free Report ), Fresh Del Monte (NYSE: FDP - Free Report ) and Archer Daniels Midland(NYSE: ADM - Free Report).

Zacks Industry Rank Analysis is written by John Blank, PhD, Chief Equity Strategist, Zacks.com.

I Have a Sleeper Industry to Share: Agricultural Operations

At the moment, the Consumer Staples Sector may be the worst place to shop for a top Zacks Rank industry.

Why?

Overvaluation! Because the S&P 500 Consumer Staples sector has a forward 12-month P/E ratio of 19.76, while the high profit margin, cash-flow-rich Info Tech sector has a 19.10. No sector is more richly priced.

In comparison, the overall S&P 500 large cap index has a forward 12-month P/E of 16.9. In simple terms, the slow-growing, defensive Staples sector is likely to be +17% overvalued to the broad S&P 500.

A sector or industry rotation away from Staples looks to be in the cards. The Finance sector -- with more Fed rates hike and Trump stimulus on the way to pad profits down the road -- has a forward 12-month P/E of 14.28.

Buy Finance stocks and sell Staple stocks, right?

However, I have found a sleeper industry in there -- Agricultural Operations .

This 6-company Zacks Industry is currently ranked #39 out of 265 (top 15%). It was #44 out of 265 just before Christmas. Check out the new Zacks Heat Map on all of our industries to see. The path of rising industry estimates goes back a few months.

Agricultural commodity price fundamentals put in a bottom early in 2016, along with the WTI oil price. Now, Materials and Energy sector companies are getting a bid, driving up shares nicely.

Momentum is on for buying fairly priced Ag Operations stocks, on the premise that if Iron Ore, Steel and Oil prices are on the way up, so should prices be for basic Agricultural commodities.

One fly in the ointment is the strong U.S. dollar. But many of these Ag Operations firms are U.S. multi-nationals. 2 of 6 are fully foreign firms that can benefit from a strong U.S. dollar.

Three Top Zacks Rank Picks--

(1) Calavo Growers (Nasdaq: CVGW - Free Report ) is a $1 billion market cap, low beta (0.58) stock priced at $65 right now. It is also a Zacks #1 Rank (STRONG BUY) pick, with a Zacks Growth score of A.

In fact, over the past month, Q1 estimates have risen from 47 cents per share to 49 cents per share, while Q2 estimates have risen from $0.61 a share to $0.67 a share. Current year estimates have risen from $2.36 per share to $2.49 per share. They report again on March 14 th .

Calavo Growers, Inc . engages in the procurement and marketing of avocados and other perishable foods and the preparation and distribution of processed avocado products.

Their expertise in marketing and distributing avocado, processed avocado and other perishable foods allows them to deliver a wide array of fresh and processed food products to food distributors, produce wholesalers, supermarkets and restaurants on a worldwide basis.

(2) Fresh Del Monte (NYSE: FDP - Free Report ) is a $3.2 billion market cap, low beta (0.29) stock priced at $62 right now. It is also a Zacks #1 Rank (STRONG BUY) pick, with a Zacks Growth score of A and a Zacks Value score of A, giving it a long-term Zacks VGM score of A.

Current year EPS estimates are at $4.15 per share. The last EPS surprise was +116%! They report again on Feb. 28 th .

Fresh Del Monte Produce Inc . is a world leader in the production, distribution and marketing of fresh produce. Their products are marketed throughout the world under the DEL MONTE brand name. It is a widely recognized symbol of product quality and reliability.

The major products are bananas, pineapples, deciduous fruit and melons. The deciduous fruit the company sells includes primarily grapes, plums, nectarines, peaches, apricots, cherries, apples, pears and citrus.

(3) Archer Daniels Midland(NYSE: ADM - Free Report) is a $26 billion market cap, low beta (0.88) stock priced at $46 right now. It is also a Zacks #2 Rank (BUY) pick, with a Zacks Growth score of C and a Zacks Value score of A, giving it a long-term Zacks VGM score of B.

Current year EPS estimates are at $2.28 per share, while next year EPS surges to $2.77. The last EPS surprise was +25%! They report again on Feb. 7 th .

Archer Daniels Midland Company procures, transports, stores, processes, and merchandises agricultural commodities and products. Its operations are classified into three business segments: Oilseeds Processing, Corn Processing, and Agricultural Services.

The company processes oilseeds, corn, wheat, cocoa and other agricultural commodities. It manufactures protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol and other value-added food and feed ingredients.

Archer-Daniels-Midland is headquartered in Decatur, Illinois.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Calavo Growers, Inc. (CVGW): Free Stock Analysis Report

Fresh Del Monte Produce, Inc. (FDP): Free Stock Analysis Report

Archer-Daniels-Midland Company (ADM): Free Stock Analysis Report

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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.


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

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