Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, February 14, 2014

Article Excerpt

CONAGRA FOODS INC., $29.36, New York symbol CAG, fell 5% this week after it cut its profit outlook for the current fiscal year. In January 2013, ConAgra paid $4.75 billion for Ralcorp Holdings, the largest maker of private label food in the U.S. To put the price in context, ConAgra’s current market cap (or the value of all its outstanding shares) is $12.3 billion. The company is taking longer to absorb Ralcorp than it expected, and strong competition has hurt sales of its branded foods. As a result, ConAgra now expects to earn $2.22 to $2.25 a share before one-time items in the fiscal year ending May 31, 2014. That’s down from its earlier forecast of $2.34 to $2.38. However, savings from the Ralcorp purchase should improve ConAgra’s earnings in fiscal 2015. The company is also merging its flour milling operations into a new joint venture called Ardent Mills. In return, ConAgra will receive $400 million and own 44% of this business. That…