The Zacks Analyst Blog Highlights: Unilever, Hormel Foods, J.M. Smucker Co, ConAgra Foods and Whirlpool
Zacks Equity Research
For Immediate Release
Chicago, IL – January 7, 2013, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeUnilever Plc. (UL), Hormel Foods Corporation (HRL), J.M. Smucker Co (SJM), ConAgra Foods Inc. (CAG) and Whirlpool Corp. (WHR).
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Here are highlights from Friday’s Analyst Blog:
Unilever Divests Skippy to Hormel
Global retailer Unilever Plc. (UL) has decided to sell its Skippy peanut butter business to Austin, Minnesota-based producer of branded food and meat Hormel Foods Corporation (HRL) for $700 million in cash.
Under the transaction, Hormel will also get Unilever's Skippy manufacturing plants in Little Rock, Ark., and Weifang, China.
Skippy, a brand of peanut butter was introduced in 1932. Skippy holds second largest market share in the U.S. after J.M. Smucker Co's (SJM) Jif, according to market researcher Euromonitor International.
Unilever had also divested a number of its businesses last year. In August 2012, ConAgra Foods Inc. (CAG) bought its Bertolli and P.F. Chang's frozen meals brands for $265 million.
The company has already divested its European frozen foods business. The markets in these developed countries are mostly saturated and the macroeconomic climate is not conducive. As a result, business in these markets has been sluggish and volumes disappointing. Therefore, the company is making a strategic move to optimize its resources and allocate them to the more promising markets.
During the first half of fiscal 2012, Unilever expanded its personal care business in Russia, Brazil and the Philippines through acquisitions. These are some of the fast-growing markets offering good growth opportunity.
An increasing middle-income population and positive consumer spending are the primary drivers of growth. With solid innovation and brand building, the company intends to drive growth in these markets in the near future.
On the other hand, Hormel's acquisition of the Skippy brand is a step toward the diversification of its business, as consumption of pork and beef in the U.S. is on a decline. The decline has been driven in recent years by higher prices, an uncertain economy and health-related concerns. The cost of grains that are fed to livestock have also risen, inflating the company’s costs.
The stock carries a Zacks #3 Rank (short-term Hold rating).
Whirlpool Electric Smoothtop on Top
Whirlpool Corp.’s (WHR) received the highest rating in its both 30-inch and 36-inch smoothtop categories and also achieved the top five spots in the wall oven category from a leading consumer magazine. The recognition adds value to the company’s investments in innovative cooking products.
The company’s Whirlpool (model nos. WOS92EC0AH and WOS51EC0AS), Maytag (MEW9530AW and MEW7530AW), and KitchenAid (KEBS109BWW) products occupied the top five positions in the wall oven category. Additionally, the Maytag brand with model nos. MEC7536W and MEC7636W grabbed the top two spots in the 36-inch electric smoothtop category.
KitchenAid with model no. KECC604BBL took the top position in 30-inch smoothtop category followed by Maytag with model nos. MEC7430WS and Maytag G7CE3034XP.
Whirlpool has taken a host of initiatives to deliver innovative cooking products. In April 2012, the company inaugurated a new manufacturing facility for producing premium cooking products in Cleveland, Tennessee. It invested $200 million in a 1 million square foot state-of-the-art production facility and 400,000 square foot distribution center.
Over the last 101 years, Whirlpool has emerged as the leading manufacturer and supplier of major home appliances. The cooking innovations introduced by the company have helped the customers over time.
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