ALEXANDRIA, VA (Nov. 7, 1997) --
Recent Price: $32 3/8
Trailing 12-month sales: $23,985 million
Trailing 12-month oper. earnings: $1,036.9 million
Trailing 12-month EPS: $1.37 EPS
Fiscal '98 EPS estimates: $1.53
Fiscal '99 EPS estimates: $1.73
Shares outstanding: 459.1 million
Annual dividend: 62.4 cents
Description: Measured by sales, ConAgra is the largest food company in the United States. While that name might not ring a bell with you, they own a lot of major brands listed below that you will probably recognize pretty quickly. On the packaged food side, which is really where we are fishing for an investment, the company is big in frozen meals, oil, deli meats, popcorn, condiments and dessert toppings.
ConAgra also focuses on providing services for agricultural producers, with significant agricultural products and commodity trading operations. The company markets and distributes a number of agricultural products like chemicals, fertilizers and animal feeds, both directly to customers and through its retail stores. The company also operates a commodity futures brokerage for products, allowing them to trade listed commodities as well as grains, oilseeds, edible beans, wool, fishmeal and sulfur.
Major brands: Hunt's, Healthy Choice, Wesson, Orville Redenbacher, Act II, Peter Pan, Van Camp's, Banquet, Marie Callender's, Kid Cuisine, Morton, Chun King, La Choy, Monfort, Armour, Swift Premium, Eckrich, Butterball, Country Pride and Reddi-Wip.
Financials: As these are simply overview reports, we will only look at a few things: how is the company currently priced relative to sales and earnings per share (valuation); what are the current operating margins (margins); how much long-term debt does the company have (leverage); and what does management do with cash (capital allocation).
Valuation: ConAgra's current market capitalization, the value of all of its outstanding shares, is $14,863.4 million (459.1 million * $32 3/8).
The company has $26.0 million in cash and $3,766.1 million in long-term liabilities according to the recent 10-Q filing. If we subtract the cash and add the debt to the market capitalization, this will give us the current value of the entire company, or the enterprise value. This is $18,603.5 million.
To get the valuation relative to sales, we simply take enterprise value and divide by the trailing sales to get 0.78 ($18,605.5 million / $23.895 million).
ConAgra trades at 23.6 times trailing earnings ($32 3/8 / $1.37 EPS), 21.2 times '98 estimates ($32 3/8 / $1.53 EPS) and 18.7 times '99 estimates ($32 3/8 / $1.73 EPS).
Margins: Operating earnings divided by revenues are the operating margins, or 4.3% ($1,036 million / $23,985 million).
Leverage: Long-term debt divided by revenues is one of my favorite ways to think above leverage. With $3,766.1 million in long-term liabilities and $23,985 million in sales, we have a 15.7% debt-to-sales ratio.
Capital allocation: Management pays a 1.9% dividiend, does not routinely repurchase shares and spends a fair bit on capital expenditures.
The numbers: In order to learn how to figure out some of these numbers yourself, or increase your ability to do so, please check our additional page through this link. This page details the recent 10-K and 10-Q reports at ConAgra, with helpful tips.
Have a Foolish weekend.
Stock Close Change Intel $77 7/16 +3 15/16 Day Month Year History Drip: +0.00% 0.00% 0.00% 0.00% S&P: +0.00% 0.00% 0.00% 0.00% NASDAQ: +0.00% 0.00% 0.00% 0.00% Rec'd # Security In At 9/8/97 1 Intel $94.69 Base: $800.00 Expenses: $ 70.50 (Moneypaper) Purchases: See above and below Cash: $634.89** Total Value: $710.00 apprx. GOAL: The portfolio began with $500 on July 28, 1997, adds $100 on the 15th of every month, and the goal is to grow the port to $150,000 by August of the year 2017. **Transactions in progress: 1. $81.00 sent on 10/17/97 to buy one share of JNJ and enroll in its DRIP. 2. $300.00 sent on 10/23/97 to buy more shares of INTC.