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.
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