Opinions
Javed Mirza
Campbell Soup Company
CPB-N
COMMENT
Aug 21, 2018
$41.210
Stock price when the opinion was issued
food processing
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COMMENT
When investors fear the pandemic and a Fed-induced slowdown, the more conservative ones buy consumer staples. Staples have been beaten up this year, but today they rallied. Campbell's is up 8% so far this month, despite last week's mixed quarter. Yesterday, they held an investor day and unveiled very bullish long-term growth targets. Could this be the start of a larger move?
food processing
PAST TOP PICK
(A Top Pick Nov 12/20, Down 12.4%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with CPB has triggered its stop at $42. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with the previous buy recommendation.
food processing
BUY
He recommends packaged food stocks as safe havens if there's a recession. CPB is up 22% this year. They keep putting up good numbers and just reported a 14-cent earnings beat, higher than expected sales (15% organic growth vs. expected 10%), and they raised their full-year forecast. There's more room to run.
food processing
BUY
Up 31% this year so far. They've always had strong brands. They had supply chain problems this year, but thankfully are in the past. They raised prices to offset shortages and won't lower prices now that supplies problems have ended. Last week they reported a monster earnings beat, 15% organic sales growth and a strong forecast. Looks very good for 2023.
food processing
A lot of bond proxies, including staples, have been under pressure. If CPB can rise above its current trend channel, we'd see a new uptrend. That's a concern, because when things go great, then people don't need to buy staples. Also, if he sees CPB move higher and break its downtrend, then it would tell him that something big is happening, that portfolio managers are becoming cautious.