In this file:
∑ Hormel Foods Boasts Strong Brands, Input Costs a Worry
∑ The Charts of Hormel Foods Are a 'Buy' on Further Strength
Hormel Foods Boasts Strong Brands, Input Costs a Worry
Zacks Equity Research
October 08, 2019
Hormel Foods Corporation (HRL - Free Report) is struggling with rising input costs as well as troubles across the Grocery and Turkey segments. Nevertheless, a sturdy brand portfolio, bolstered by prudent buyouts and innovations, has helped the company stay afloat. In fact, the presence of strong brands is fueling growth in the Refrigerated Foods unit. Letís delve deeper.
Robust Brands Aid Business Growth
Strong demand for popular brands like Applegate, Natural Choice, SPAM, Muscle Milk and Wholly Guacamole dips have been augmenting the companyís revenue prospects. Well-chalked buyouts have further strengthened the companyís portfolio. To this end, the Columbus and Fontanini buyouts is driving performance in the Refrigerated Foods segment. Notably, through the inclusion of Columbus, the company has been able to develop the new Hormel deli solutions division that is included within refrigerated foods and is catering to retailer needs. Also, the Ceratti acquisition is boosting growth in the International segment.
Markedly, the Refrigerated Foods category is steadily growing on the back of strong brands and effective strategies. During third-quarter fiscal 2019, the unit generated sales of $1,301.1 million, up roughly 1% year over year. The upside was fueled by products like Hormel Bacon 1, Hormel Fire Braised and Old Smokehouse as well as retail sales of Hormel Black Label and Columbus. We expect the Refrigerated Foods segment to continue benefiting from its value-added growth, effective pricing and innovation.
Additionally, the company focuses on launching products to meet consumersí changing preferences. It also adheres to strategic promotional investments to support growth of its brands.
Factors Hurting the Company ...
The Charts of Hormel Foods Are a 'Buy' on Further Strength
Let's see if this is a good place to go long HRL.
By Bruce Kamich, TheStreet/RealMoney
Oct 07, 2019
Jim Cramer will be watching Thursday's earnings report from Hormel Foods Corp. (HRL)† which also holds an analyst meeting. Cramer said on his Mad Money program Friday night that he'd buy Hormel ahead of this meeting.
In this daily bar chart of HRL, below, we can see a mixed picture for the interplay of price and indicators. Prices have been creeping up from a low in May and HRL is above the rising 50-day moving average line. HRL is also above the 200-day line but the slope of that longer-term measure of trend is still negative.
The daily On-Balance-Volume (OBV) line was flat from May to August and only recently began to improve modestly, telling us that buyers of HRL are only modestly aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but not by much.
†In this weekly bar chart of HRL, below, we see a more positive-looking chart and combination of indicators. Here prices have been in an uptrend from 2017. After a correction prices are back above the flat 40-week moving average line.
The weekly OBV line has moved up strongly the past three months or so signaling a shift to more aggressive buying by investors...
Bottom line strategy ...
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