Corn-fed gains at ConAgra: food stock looks to keep up the beef.Sometimes the best defense is a good offense. When things look uncertain for the economy, Wall Street turns to defensive stocks--companies that should have good earnings no matter what the economic climate. Food makers like ConAgra, an Omaha, Nebraska-based company that appeared in BE's October 1996 Stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. column, fit that description. After all, in recessions as well as boom times, everyone has to eat. Since our recommendation, ConAgra, however, went on a tear, roaring ROARING. A disease among horses occasioned by the circumstance of the neck of the windpipe being too narrow for accelerated respiration; the disorder is frequently produced by sore throat or other topical inflammation. 2. from a price of $42.25 a share to $67.88, a hearty heart·y adj. heart·i·er, heart·i·est 1. Expressed warmly, exuberantly, and unrestrainedly: a hearty welcome. 2. 61% increase. That means a $1,000 investment in ConAgra would now be worth about $1,610. That's partly due to a strong economy. More importantly, though, ConAgra won Wall Street over with a thorough restructuring to cut costs and benefit shareholders. The outlook remains strong, says Douglas Hansford, a stockbroker Stockbroker 1. An agent that charges a fee or commission for executing buy and sell orders submitted by an investor. 2. The firm that acts as an agent for a customer, charging the customer a commission for its services. for M.L. Stern in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. who picked ConAgra last year. "This company does nothing very flashy," he says, "but you can bet that they'll grow at a steady 10% clip." Long-term trends surely won't hum In the U.S., ConAgra and its packaged food peers have kept up with changes in consumer tastes for more health-conscious products. Additionally, rising U.S. and international standards of living are providing important avenues for growth worldwide. For those reasons, Wall Street's optimism remains relatively strong. ConAgra is projected to grow earnings at a rate of 12.5% over the next five years, compared with 7.1% for the S&P 500. And ConAgra's recent run has pushed its stock price to 24 times projected 1997 earnings, compared with 20 for the S&P 500. Eight out of 15 brokerage analysts that cover the company still rate it a buy, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Zacks Investment Research Zacks Investment Research A firm that compiles earnings estimates and brokerage firm investment recommendations for thousands of publicly traded firms. . That's a sign that ConAgra could still have value to come as a long-term holding. NYSE: CAG Current price: $67.88(*) Price at recommendation: $42.25 52-week high/low: $68.63/$41.50 Earnings per share: $2.68 P/E projected 1997 earnings: 25 (*) As of 7/16/97 |
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