logo
  Join        Login             Stock Quote

Sanderson Farms Inc. (SAFM) Could Be the Next Super Bowl Winner

 November 13, 2012 04:37 PM
 


(By Rich Bieglmeier) Following up on our Sector Performance Review, iStock found that food stocks stand out today. Campbell Soup Co. (CPB), Flowers Foods Inc. (FLO), Hormel Foods Corp. (HRL), The Hershey Co. (HSY), J&J Snack Foods Corp. (JJSF) and McCormick & Company Inc. (MKC) could make for a tasty portfolio - each is up nicely in an otherwise lackluster day.

[Related -A Pause In The Action]

However, Sanderson Farms Inc. (SAFM) might be best positioned to break out of the cage from a technical analysis standpoint. Sanderson is an integrated poultry processing company that engages in the production, processing, marketing, and distribution of fresh, frozen, and prepared chicken products in the United States.

SAFM is on the verge of escaping from the top side of a bullish, right angle triangle. The only thing holding a free range run is the 200-day moving average of $47.06. If Wall Street continues to take the food sector higher, the consumer goods stock should move beyond 200-day resistance and could challenge $52 in the near-term – a 10.6 percent upside.

[Related -Hormel Foods Corp. (HRL) Dividend Stock Analysis]

Shares could get a boost from rising relative strength and a rising MACD line. Additionally, bulls could get a two-for-one spark above the 200-day mark as it should signal that the stock will continue to clean up a June gap down from $52 to $45.

The poultry company is scheduled to report earnings on December 17. 2012. Wall Street anticipates earnings of 24 cents per share. If the No. 2 chicken producer's earnings are any indication of what's to come, then SAFM should do well. Pilgrim's Corp. (PPC) reported earnings of 18 cents per share while the street targeted a consensus of 6 cents – a 200 percent upside earnings surprise.

PPC's success was attributed to chicken wings, that's right, chicken wings. It's economic rule 101 – supply and demand. The demand for chicken wings is high as the supply of wings is shrinking as feed costs rise.  The price for wings rises, and so do profits.

Pilgrim's Pride management forecast continued demand for the messy, tasty snack in 2013, all while chicken production drops another 2 percent to 3 percent. As a result, prices are expected to continue to rise right as we head into peak chicken wing eating season – the Super Bowl!

The last positive earnings surprise was friendly to Sanderson Farms shareholders. The street was expecting $1.20 and instead SAFM posted $1.25. Shares rose 9.3 percent in the days surrounding the quarterly check-up.

Overall, with chicken wings season coming, a technical breakout pending, a strong sector profile, and the potential for an earnings surprise, short-term investors might consider Sanderson Farms.
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageA Lesson For the Bears From 2007

Bears almost never get a top where they want it. During 2007, the S&P 500 fell below its 200-day moving read on...

article imageGoogle: Still Opportunities Ahead

Google (GOOGL) shares are finally recovering after announcing third-quarter earnings last week that were read on...

article imageThis Technical Indicator May Be The Simplest Way To Pick Winning Stocks

What's the first rule of successful real estate investing? Of course, you just said to yourself, "location, read on...

article imageUpdate On Crude Oil Markets

Crude prices came under pressure again today. According to Reuters (from last week), the Saudis “will read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.