Pinnacle Foods: Growth Story


After reporting Q4 earnings, Pinnacle Foods (NYSE:PF) looks poised to have a strong year in 2017. The stock reported year-over-year Q4 EPS growth of 13%, and sales growth of 19%. When evaluating the consumer-food industry, Pinnacle Foods represents the a great growth opportunity currently for investors.

A Valuable Acquisition:

Like most consumer-food companies, Pinnacle was looking for a way to rotate its product portfolio towards more healthy labels. In January 2016, Pinnacle completed its acquisition of Boulder Brands. This acquisition boosted its healthy food portfolio significantly, with brands such as Udi’s, Glutino, Evol, and Earth Balance. This acquisition has proven to be a slam dunk for the company, as net sales for the Boulder segment increased to $364.7 million in 2016, compared to $41.5 million in 2015.

Boulder has not only been great for adding earnings power to Pinnacle’s food portfolio, but the Boulder acquisition has positioned the company well for a potential takeover. In 2016, we saw another mid-cap consumer-food company with a health conscious portfolio get acquired, when Whitewave Foods (NYSE:WWAV) was bought out by Danone (OTCQX:DANOY). There is speculation that a similar situation could take place for Pinnacle soon. There were whispers that ConAgra (NYSE:CAG) might be interested in Pinnacle, but so far they remain speculation.

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