Sanderson Farms: Effect of Lower Product Prices on Fiscal 1Q16
Moving averages
On February 25, 2016, Sanderson Farms (SAFM) closed at $88.68. It was trading at 18.1%, 11.5%, and 6.7% above its 100-day, 50-day, and 20-day moving averages, respectively. The stock has risen 9% so far in 2016. It’s on a rising trend due to positive expectations for chicken prices.
Sanderson Farms’ peers
Sanderson Farms’ peers in the industry include Pilgrim’s Pride (PPC), Tyson Foods (TSN), and Hormel Foods (HRL). Pilgrim’s Pride closed at $23.70, which is 12.0% above its 100-day moving average, 6.5% above its 50-day moving average, and 5.2% above its 20-day moving average. It has risen 8% so far in 2016.
Tyson Foods closed at $66.49, which is 30.2% above its 100-day moving average, 20.1% above its 50-day moving average, and 11.8% above its 20-day moving average. It has risen 25% so far in 2016.
Hormel closed at $43.80. It’s trading 17.3% above its 100-day moving average, 9.1% above its 50-day moving average, and 5.0% above its 20-day moving average. It has risen 12% so far in 2016.
The AdvisorShares TrimTabs Float Shrink ETF (TTFS) invests 1.2% in PPC and 1.2% in SAFM. TTFS is trading 1.6% below its 100-day moving average, 2.2% above its 50-day moving average, and 3.9% above its 20-day moving average. It closed at $53.01 on February 25, 2016. The Guggenheim S&P 500 Pure Value ETF (RPV) invests 1.6% of its holdings in Tyson Foods.
Analysts’ estimates
For the next 12-month period, analysts’ estimates indicate upsides of 5.2% for Pilgrim’s Pride and 6.1% for Tyson Foods from their current levels on February 25. Hormel Foods and Sanderson Farms have already beaten estimates by 1.1% and 11.8%, respectively, on February 25. SAFM, PPC, TSN, and HRL have risen 14.4%, 7.3%, 24.7%, and 11.0%, respectively, YTD (year-to-date). TTFS has fallen 2% YTD as of February 25.
In the next part of the series, we’ll see what affected Sanderson Farms’ margins for fiscal 1Q16 and management’s view of the results.
Browse this series on Market Realist: