Stockchase Opinions

Jim Cramer - Mad Money Campbell Soup Company CPB-N BUY ON WEAKNESS Aug 07, 2023

Will buy Sovos Brands for $2.7 billion all cash. Makes sense, giving Campbell's a growth engine at a time when the stock is out of favour, down 22% YTD. Buy this dip.

$44.340

Stock price when the opinion was issued

food processing
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COMMENT
It reports Wednesday. Unsteady soup sales and climbing costs could pressure the stock, like it has before.
DON'T BUY
It reported this week, stating that it's struggling with raw costs and sales growth. The stock is cheap, but not cheap enough to buy, unless management can convince. He isn't holding his breath. They hold an investors' day on Tuesday.
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?
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Nov 12/20, Down 4.1%)Stockchase Research Editor: Michael O'Reilly To ensure progressing capital returns of our PAST TOP PICK with CPB, we recommend trailing the stop (from $38) to $42.
premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

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.
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.
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.
BUY ON WEAKNESS

Strong performance lately.
Excellent brand name with mature assets.
Defensive name that won't see major growth.

DON'T BUY

Their product line is very mature and offers little growth. This has been a sideways stock. Their snacks business is doing well, but not a growth driver. Either the stock declines and the dividend rises, or they buy another company.