Stock on Focus: Pinnacle Foods Inc. (PF)

Company Profile:

Pinnacle Foods Inc., through its subsidiaries, manufactures, markets, and distributes branded convenience food products in North America. It operates through three segments: Birds Eye Frozen, Duncan Hines Grocery, and Specialty Foods. The Company operates through three segments: the Birds Eye Frozen segment, the Duncan Hines Grocery segment and the Specialty Foods segment. The Birds Eye Frozen segment and the Duncan Hines Grocery segment, which collectively represent its North America Retail operations, include Birds Eye, Birds Eye Voila!, Van de Kamp’s, Mrs. Paul’s, Lender’s, Celeste, Hungry-Man and Aunt Jemima brands. The Duncan Hines Grocery Segment includes Duncan Hines, Vlasic, Log Cabin, Armour, Brooks and, Nalley brand among others. Specialty Foods Segment consists of Snack Products and Foodservice and Private Label. Pinnacle Foods Inc. is headquartered in Parsippany, New Jersey.

Recent News:

On January 8, 2016, Pinnacle Foods Inc. announced that it has extended its tender offer to purchase all outstanding shares of Boulder Brands, Inc. (BDBD) (“Boulder”) for $11.00 per share in cash. All terms and conditions of the tender offer, other than the expiration date, remain the same.

Its Board of Directors has declared a quarterly cash dividend of $0.255 per share, payable on January 8, 2016 to all common stockholders of record at the close of business on December 21, 2015.

Net sales in the third quarter of 2015 increased 2.0% to $636.3 million, compared to net sales of $624.0 million in the year-ago period. Net earnings declined to $48.1 million, compared with net earnings of $136.0 million in the year-ago period.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

PF’s strengths can be seen in its strong growh and better profitability. Its net income has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator and RSI is increasing to 54.33. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry. We rate CPinnacle Foods Inc. (PF) a BUY.