On the elements of volume, dividends, and PE ratios, I have now assigned the ‘undecideds’ to either ‘on the list’ or ‘eliminated’.
The PE ratio average for this industry seems to be around 25. The majority of them are in the range of the teens through the thirties, so I am considering anything in that range acceptable. Stocks like BDBD (Boulder Brands, which never made it onto my original list) would be cause for concern at 98.83, as would Dean Foods (already eliminated in first round) at 4.05. BNNY (Annie’s) is on the high side at 52.39, but since the stock price is going down, the PE will as well – therefore I’m going to wait and see how low it goes during this study.
ANFI (Amira Nature Foods) stays on the list. The more I read about them, the more I like it.
CUSI (Cuisine Solutions) is eliminated based on volume. Trade volume is approximately 505 shares sold per day, and for a lower priced stock, it means it may be difficult to find a buyer in the event that I wanted to sell it.
GIS (General Mills) stays on the list, mostly due to its high dividend. At 3.15%, it’s one of the highest in the industry.
GUZBY (Grupo Herdez) is eliminated, also due to volume. Well under 1000 shares per day are being sold, and I think it’s a bit too risky. It’s unfortunate, as they seem to be growing. Just yesterday I saw some Herdez branded frozen dinners in the grocery store, which I had never seen before.
KRFT (Kraft) stays on the list, also due to a high dividend of 3.97%. This is the highest dividend of all the stocks mentioned on this blog.
MDLZ (Mondelez) stays on the list – it has a (smaller) dividend, volume and PE are fine.
MED (Medifast) is eliminated – this decision didn’t have anything to do with PE, dividends, or volume, but more to do with poor performance in 2013 and negative outlooks from experts.
MGPI (MGP Ingredients) is eliminated due to difficulty in finding information. Because it is not a consumer brand, but rather a company that supplies ingredients to other companies, it’s much harder to track.
OME (Omega Protein) stays on the list. Its PE ratio is on the low end (11.03%).
STKL (SunOpta) and TOF (Tofutti) stay on the list as well. There are no PE ratios on these two since they are presently negative on income, but from looking at the reports, their losses are getting smaller with every quarter that passes.
TR (Tootsie Roll) is eliminated. Although the volume and PE were fine, I don’t see anything beneficial to this stock over RMCF (Rocky Mountain Chocolate). TR is priced higher and offers a lower dividend than RMCF.
UN (Unilever) stays on the list. It also carries a fairly high dividend of 3.65%.
The updated list:
ANFI – Amira Nature Foods
BNNY – Annie’s
CAG – ConAgra Foods
CVGW – Calavo Growers
FLO – Flowers Foods
GIS – General Mills
GRBMF – Grupo Bimbo
HSH – Hillshire Brands
JBSS – John B SanFilippo & Son
JMBA – Jamba Inc
JVA – Coffee Holding CO
K – Kellogg Co
KRFT – Kraft
LNCE – Snyders-Lance
LWAY – Lifeway Foods
MDLZ – Mondelez
NUTR – Nutriceutical
OME – Omega Protein
PF – Pinnacle Foods
PPC – Pilgrim’s Pride
RIBT – RiceBran Technologies
RMCF – Rocky Mountain Chocolate Factory
SENEA – Seneca Foods
SNAK – Inventure Foods
STKL – SunOpta
TOF – Tofutti Brands
TSN – Tyson Foods
UN – Unilever
WILC – G Willi-Foods
WWAV – Whitewave Foods Co.
This is still way too many, with 30 on the list.
Four of the stocks from this list – Grupo Bimbo, Coffee Holding Co, RiceBran Technologies and Tofutti Brands – are low priced stock and really belong on a separate list. These would not be a primary stock purchase, but a possible buy in conjunction with a more major stock.
If I were to buy, say, 100 shares of Kraft at $54.76 per share (spending $5476.00), I probably wouldn’t want to spend any more on low priced stocks – but if I bought 250 shares of Rocky Mountain Chocolate at $11.65 per share (spending $2912.50), I might also buy some shares of a lower priced stock.
For the next round, I am going to dig into the SEC filings a bit more, specifically looking at net earnings and how they compare to previous reports.
At this stage, I was also going to check the current values of each stock to see how they have fared in the week since I started this blog, but with the recent market downturn, the results aren’t really going to reflect sentiment on the individual companies.
My plan is to narrow my primary list (not including the low priced stocks) down to 10, but it may take a few days. The market seems to have come back up a bit today so I’m hoping it will settle.