Opinions
Jim Cramer - Mad Money
Utz Brands
UTZ-N
DON'T BUY
Aug 18, 2021
They had a poor quarter. The snack business belongs to Frito-Lay, and he'd prefer Pepsico before Utz.
$17.630
Stock price when the opinion was issued
food processing
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BUY
This is the year of the SPAC, many of which are too opaque for him to understand and feel confident about. Utz's SPAC is an exception. Last summer, a SPAC bought UTZ and rolled up the snack-food business. Since summer, they've made some more acquisitions including $480 million for a tortilla-chip company. Just reported a top and bottom-line beat with a strong full-year forecast.
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COMMENT
They merged with a SPAC last year and have since made acquisitions. The stock has doubled since last summer. Last night, they delivered solid, but disappointing numbers and shares tumbled 4%. Today, the stock rebounded. UTZ beat earnings expectations and they have a promising national expansion plan.
food processing
TOP PICK
Collier Creek Holdings went SPAC in late-August 2020 to become Utz, a maker of snacks under such brands as, Zapp's, Golden Flake and Good Health. This Pennsylvania company has been around for nearly a century, but went public at the right time—in the middle of the pandemic. People stay at home and eat snacks. For example, Q3 year-over-year sales jumped 24%. Last December, Utz bought Truco Enterprises, which churns out tortilla chips and salsa for $480 million. A good fit that will help transform Utz from a regional player into a national one. The news bumped shares from $19 to $22.50. Utz has been climbing ever since, though tumbled 4% after announcing slightly disappointing guidance on March 18 though it crushed Q4 earnings estimates. Since then, Utz shares have been choppy, but rising steadily in the past week. Utz pays a modest dividend of 0.96%, but six analysts signal a buy and two a hold, and they target $27.13, or 8.52% upside. Despite a reopening American economy, Utz remains poised to sell snacks and meet its projections.
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