Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of food manufacturer B&G Foods
So what: Sales for the fourth quarter rose 4.6% to $141.9 million, above the $138.9 million that Wall Street had projected for the quarter. Net income soared compared to last year when the bottom line was bitten by some hefty one-time costs. Adjusted earnings per share clocked in at $0.28 and decisively stomped the $0.20 average analyst estimate. The company's gains were driven largely by higher volume, a mix shift to more profitable products, and a decrease in commodity costs.
Now what: Top that strong quarter with a projected EBITDA range of $123 million to $126 million for 2011 -- comfortably above the analysts' estimated $121.6 million -- and you've got a very pretty picture. In fact, there's a lot to like at B&G right now. According to one analyst, the company has done so well hedging commodity prices that cost inflation will be a very minor issue in the year ahead. That's not exactly the experience at other food and beverage companies like PepsiCo
Of course even with all this nutritious financial goodness at the company, investors still may want to tread carefully -- the stock is pretty richly priced at more than 19 times trailing EPS.
Want to keep up to date on B&G? Add it to your watchlist.
PepsiCo is a Motley Fool Income Investor pick. Motley Fool Options has recommended a diagonal call position on PepsiCo. The Fool owns shares of PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.