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Resilient Sector: Consumer Packaged Goods to Grow 16%

September 19, 2013 | About:
Sally Jones

Sally Jones

49 followers
The rising price of commodities is a key issue for food manufacturers, according to the Grocery Manufacturers Association which issued its 2013 Financial Performance Report a few months ago. The GMA PricewaterhouseCooper’s analysis for 2012 said that total retail sales reached $1.1 trillion in 2012, with $568 billion spent at grocery stores and $530 billion on food and beverage service. In spite of a decline in net sales for the year, retailers and packaged goods companies increased net sales in food by 7%, beverage at 5.5% and household products at 3.2% in 2012. According to the organization, consumer package companies are expected to increase direct-to-consumer sales by 16% over 2012. Based on information from 144 sector companies, the report cites digital channels and mobile adoption as major influences on retailing and manufacturing in a resilient sector where approximately 52% of U.S. consumers buy direct via e-commerce.

The consumer packaged goods sector currently lists 23 companies out of 170 on a 52-week low. The low ratio is 0.14. Using the GuruFocus 52-week low screener as a rapid-research tool can help investors find stocks that are dipping to new lows but are still held by top investors.

Here’s a look at two companies in a 52-week low. While the billionaires are shying away from most of these packaged goods companies on a low, research did uncover two stocks with a yield, held by billionaires.

Industry Sector: Consumer Packaged Goods Sector

Highlight: CCA Industries Inc. (CAW)

Down 23% over 12 months, CCA Industries Inc. has a market cap of $24.1 million, and trades with a P/B of 1.10.

The current share price is around $3.40, or 29.2% off the 52-week high of $4.80. The yield is 6.10%.

Incorporated in 1983, CCA Industries Inc. manufactures and distributes health, cosmeceutical and beauty aid products. Its products are manufactured by contract manufacturers, according to the company's specifications and formulations. A main brand for the company is Plus+White, an oral healthcare product.

CCA Industries reported financial results for its second quarter ended May 31, 2013, with total revenue of $11,262,212, compared to $14,710,472 in the same quarter of 2012. The company had a net loss of $156,836 for the second quarter of 2013, compared with net income of $302,100 in the same period one year ago, according to a company press release.

Guru Action: As of June 30, 2013, Jim Simons is the sole guru stakeholder.

In second quarter he increased his position by 0.67%, buying 2,000 shares at an average price of $3.68 per share, for a loss of 7.6%.

In five years of holding, he has averaged a loss of 40% on 72,600 shares bought at an average price of $5.70 per share. He has averaged a loss of 31% on 38,000 shares sold at an average price of $4.93 per share.

Track share pricing, revenue and net income:

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Highlight: Charoen Pokphand Feedmill Co. (CPOKY)

Down 31% over 12 months, the current CPOKY share price is around $2.97, or 40.6% off the 52-week high of $5.00. The yield is around 2.70%. The GuruFocus financial and performance checkup shows a good sign: the CPOKY share price is near its one-year low of $2.95.

Established in 1978, Charoen Pokphand Feedmill Co., referred to as CPF, became a public company in 1994. The Thai company operates in agro-industrial business engaged in animal feed manufacturing and animal farming, as well as food manufacturing and food retail. CPF invests overseas in 9 countries, has subsidiaries in 17 countries and exports to over 40 countries. CPF is the leading producer of feed and one of the largest producers of poultry in the world. Bangkok Post reported in July that the company plans to acquire an 83% stake in a large grain and pork company, Russia Baltic Pork Invest ASA (RBPI).

Charoen Pokphand Foods is listed on the Stock Exchange of Thailand under the ticker: CPF. According to Bangkok Post, CPF had a net profit of 206 million (Thai baht) in 2012, and sales of 5.17 billion (Thai baht). (Currency conversion: 1 Thai baht = $0.032 USD). The company expects 2013 sales to be 10% to 15% higher than last year, reported by the news article.

Charoen Pokphand Feedmill Co.is part of the C.P. Group, the largest company in Thailand not owned by the government. C.P. Group’s estimated revenue for 2013 is around $46.3 billion. The company employs 280,000.

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Guru Action: As of June 30, 2013, Ken Fisher is the sole guru stakeholder. His holding of 23,060 shares bought in the fourth quarter of 2012 at an average price of $4.47, lost 33.6%. In the second quarter, the holding share price dropped to $3.98, for a loss of 25.4%.

Fisher has held CPOKY for four quarters total, averaging a loss of 37% on 23,060 shares at an average price of $4.75 per share.

Track share pricing:

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.4/5 (5 votes)

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