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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Pilgrim's Pride (PPC) ten years ago? It may not have been easy to hold on to PPC for all that time, but if you did, how much would your investment be worth today?
Pilgrim's Pride's Business In-Depth
With that in mind, let's take a look at Pilgrim's Pride's main business drivers.
Pilgrim's Pride Corporation (PPC) is focusing on strengthening its Prepared Foods category. The category grew in the United States during the fourth quarter of 2019 on continued investments in R&D and sales as well as marketing of new product innovations. Also, the company has been increasing its product mix for organic category, including No-Antibiotics-Ever products, to cater customers' evolving tastes.
This Greeley, CO based company is engaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products. The company offers its services in the United States, Mexico, France, the Netherlands, Puerto Rico and Mexico through a number of distributors, retailers and food service operators. Since its inception in 1946, Pilgrim's Pride has expanded its business on the back of acquisitions like Green Acre Foods, Inc., WLR Foods, Inc., Gold Kist, GNP Company and Moy Park. Currently, the company operates as a subsidiary of JBS USA Holdings, Inc. Also, Pilgrim's Pride acquired 100% of the membership interests of JFC LLC and its subsidiaries (together, “GNP”) from Maschhoff Family Foods, LLC on Jan 6, 2017. Apart from these, it bought 100% of the issued and outstanding shares of Moy Park on Sep 8, 2017.
Major product categories offered by the company are fresh, fully cooked, ready-to-cook and individual frozen chicken. Notably, its fresh chicken products, namely, refrigerated (nonfrozen) whole or cut-up chicken, pre-marinated or non-marinated, and pre-packaged case-ready chicken, are being sold to foodservice and retail markets. Also, Pilgrim’s Pride offers prepared chicken products, which can further be classified into portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties, and bone-in chicken parts.
Pilgrim's Pride serves its clients through a single business segment. As a seller and producer of chicken items, it either produces or buys chicken for resale in the United States, the United Kingdom, Europe and Mexico. Pilgrim's Pride operates in three reportable business segments that include the United States (62% of 2020 sales), Europe (27.1% of 2020 sales) and Mexico (10.9% of 2020 sales), respectively.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Pilgrim's Pride, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in March 2011 would be worth $3,446.40, or a 244.64% gain, as of March 15, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 202.34% and the price of gold increased 18.51% over the same time frame in comparison.
Analysts are forecasting more upside for PPC too.
Shares of Pilgrim’s Pride have outpaced the industry in the six months. The company is benefiting from strength in European operations. This was reflected in its fourth-quarter 2020 results, with the top and the bottom line increasing year over year. The upside can be attributed to product portfolio strategy, operational endeavors and Key Customer strategy that helped mitigate the impact of tough market conditions. Undeniably, healthy performance in the Mexican operations also drove the results. Also, Pilgrim’s Pride consistently strives to improve portfolio and strengthen competitive position through innovations. However, the company is seeing lower sales from U.S. operations for a while. Also, higher cost of sales and pandemic-induced expenses were a drag. Notably, earnings fell short of the Zacks Consensus mark in the quarter.
The stock has jumped 17.21% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021; the consensus estimate has moved up as well.
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