Monday, 18. December 2017  
09.03.2016 23:07
Author: Alex Waber

STOCK SCREEN: Food & Beverage Stocks With Solid Upside To Intrinsic Value, Healthy Balance Sheet And Relative Strength

 

Food stocks have turned into surprise hits with investors this year, even as the rest of the market struggles. It's not just a few stocks, it is the whole food sector of the S&P 1500 that has gained an average of 4.4% in 2016 and nearly two-thirds of stocks in the food catagory are up during a period that has challenged the rest of the market.

Canned soup, processed meat, cereals and soft drinks may not be high-tech or trendy businesses but investors are willing to pay up for food stocks, as the average price-to-earnings ratio on companies has risen to nearly 27, which is 11% higher higher than the trailing P-E on the entire S&P 1500 measured the same way.

In this week’s screen, we want to find out which stocks represent the best of what the food and beverages sector has to offer. We screened for stocks with solid margin-of-safety, healthy balance sheet and good relative strength.

 

Here are the filter criteria:

1. Market capitalization above 1 bn.

2. Relative strength over 12 months.

3. NetDebt / EBITDA ratio below 2.

4. Upside to Intrinsic Stock Value according to our AVM’s Greenblatt and Graham inspired value estimate.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

INDUSTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

 AUSTEVOLL SEAFOOD ASA

 Norway

 Food

60.00

12163

36.7

37.1

19.3

 COCA-COLA AMATIL LTD

 Australia

 Beverages

8.92

6811

39.6

12.0

5.9

 FRESH MARKET INC/THE

 United States

 Food

22.67

1065

196.5

12.1

30.7

 METCASH LTD

 Australia

 Food

1.74

1615

111.5

102.7

43.0

 SAINSBURY (J) PLC

 United Kingdom

 Food

269.10

5179

15.9

10.8

7.6

 SUEDZUCKER AG

 Germany

 Food

13.57

2770

58.7

30.9

52.1

 WM MORRISON SUPERMARKETS

 United Kingdom

 Food

201.20

4696

33.6

30.4

60.7