![]() Sanderson does have a balance sheet that is worthy of some adulation, and it is gaining market share. ![]() With Pilgrim's Pride declaring bankruptcy and Tyson Foods down more than 35% over the last year, Sanderson's largely avoided the difficulty surrounding the industry and its two main competitors in the past year. The poultry industry may be due for a rebound, but Sanderson Farms is actually trading higher than where it was a year ago, so there is not a huge downside that it would be rebounding from. While this analysis may be correct, we think that Sanderson Farms shares are simply too overbought currently. Coverage of Sanderson Farms was initiated at a Buy rating, while Tyson was given a Hold. The Keybanc analyst noted lower feed costs and a tendency for consumers to eat a home more often both should be positive for the stock. The research note was pretty positive indicating that the analyst believe that the poultry business is due for a rebound. Much of the recent momentum has centered around KeyBanc initiating coverage on Sanderson Farms as well as Tyson Foods ( TSN). The stock has enjoyed some significant appreciation recently as the stock is up nearly 15% in the last month. ![]() However, as of this week's report we are downgrading Sanderson Farms to Overvalued. Sanderson Farms ( SAFM) is one of the premier poultry producing companies in the United States with $1.72 billion in sales last year. ![]()
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