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Today’s Research Reports on Stocks to Watch: Conagra Brands and National Beverage

NEW YORK, NY / ACCESSWIRE / June 28, 2018 / Conagra Brands saw it shares slip over 7% despite confirming that it will be acquiring Pinnacle Foods for roughly $8.1 billion yesterday. Shares of National Beverage Corp. also saw losses after a WSJ report said the SEC is questioning the company's sales measurements.

RDI Initiates Coverage on:

Conagra Brands, Inc.
https://rdinvesting.com/news/?ticker=CAG

National Beverage Corp.
https://rdinvesting.com/news/?ticker=FIZZ

Conagra Brands, Inc. shares closed down 7.27% on about 34.3 million shares traded on Wednesday. What has been running through the rumor mill has finally become a reality as Conagra announced yesterday that it will acquire Pinnacle Foods Inc. for around $8.1 billion, 10.9 billion including debt. The transaction will be paid for in cash and stock and will make Conagra number two in the frozen food industry in the U.S. following after Nestle. Combining the two companies will result in a market cap of roughly $23 billion. CEO of Conagra Brands, Sean Connolly remarked, "The acquisition of Pinnacle Foods is an exciting next step for Conagra Brands. After three years of transformative work to create a pure-play, branded food company, we are well-positioned to accelerate the next wave of change. The addition of Pinnacle Foods' leading brands in the attractive frozen foods and snacks categories will create a tremendous opportunity for us to further leverage our proven innovation approach, brand-building capabilities, and deep customer relationships. With greater scale across leading, iconic brands, an unwavering focus on driving profitable growth, and a strong balance sheet and cash flow, we are creating a tremendous platform to drive meaningful shareholder value." Edward Jones Analyst Brittany Weissman noted that, "M&A is a common theme we're going to continue to see as the growth environment has slowed for many packaged goods companies." She added, "There are benefits to M&A on the cost side of things from buying power to supply chains, by being larger. But there's also benefits on the negotiating side with prices, merchandising and working with retailers." Conagra also reported better than expected fourth quarter results with net sales of $2.0 billion versus the expectation of $1.9 billion.

Access RDI's Conagra Brands, Inc. Research Report at:
https://rdinvesting.com/news/?ticker=CAG

National Beverage Corp. shares closed down 8.87% on about 1.2 million shares traded on Wednesday. The drop came on the news that Securities and Exchange Commission raised questions about some of the sales measurement of company referenced by the CEO in recent press release. SEC asked the company to explain its internal performance measures for sales, "velocity per outlet" (VPO) and "velocity per capita" (VPO). The two measurements were referenced by CEO Nick Caporella in press releases dated May 4 and 5 of 2017. In the May 4 press release, the CEO said that VPO and VPC help National Beverage create growth "never before thought possible." On May 5, it was claimed that VPO was "flashing solid green numbers as we bring FY2017 to a close." The company, which owns LaCroix, has declined to explain its claims of growth as requested by the SEC. It was in January that the SEC had asked the company to explain what chief executive Nick Caporella meant when he said that the company had "magnified" two proprietary sales metrics to create "growth never before thought possible." The company's controller Gregory Cook had written a response to the SEC that said, "This information is as secretive as the formulas of our beverages and should not be disclosed to our competition." Cook also said, "The metrics that Mr. Caporella referenced are used to establish goals for certain customers, but are not utilized to manage the overall executional side of our business. VPO and VPC therefore are not key performance indicators that would give readers a view of the Company through the ‘eyes of management.’" In the last two days, shares have dropped over 13%.

Access RDI's National Beverage Corp. Research Report at:
https://rdinvesting.com/news/?ticker=FIZZ

Our Actionable Research on Conagra Brands, Inc. (NYSE: CAG) and National Beverage Corp. (NASDAQ: FIZZ) can be downloaded free of charge at Research Driven Investing.

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Disclaimer: This article is written by an independent contributor of RDInvesting.com and Nadia Noorani, a CFA® charter holder, has provided necessary guidance in preparing the document templates. RDInvesting.com is neither a registered broker-dealer nor a registered investment advisor. For more information please read our full disclaimer at www.rdinvesting.com/disclaimer.

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