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Campbell Soup (CPB)

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  • Barrons kirjutab negatiivselt Campbell Soupist (CPB). Prognoositavaks kasumikasvuks 5% (pikaajaline 7%), forward P/E ca 20 ning konkurents on aina kasvav. Graafik on ka kangesti tipulähedane. Aktsias võib olla päris palju õhku sees, kuid siiani on ilusasti püsitud "kaitsva" sektori staatuse tõttu. Firmaga on seotud aga hoopis huvitavam väike ettevõte Senomyx (SNMX), mis toodab maitsevõimendajaid (näiteks soola maitse võimendamiseks diabeetikutele mõeldes) ning CPB on üks suurimaid kliente. Barronsi mõttekäik siin:
    RIDING HIGH ON A successful corporate turnaround and Wall Street's infatuation early this year with so-called defensive stocks, Campbell Soup has certainly earned the slogan, "M'm, M'm, Good!"

    The company's stock has gained 25% year-to-date, outpaced the S&P 500 index and has ranked as one of the best performers in the basket of packaged-food stocks tracked by Thomson Financial/Baseline.

    But that might be as good as it gets for Campbell's share price for a while.

    "I don't see a lot of upside for this stock," says David Tuzzolino, consumer staples analyst with Mellon Financial's private wealth management group. "Campbell is a good company, and the stock has had a very good year so far, but I think there is a lot of enthusiasm already baked into the stock price."

    Certainly, food makers remain a defensive sector if the economy lands hard next year. Investors still need to eat, even in a slowing or recessionary economy. But like many consumer staple stocks, Campbell appears expensive, especially compared to the company's staid earnings growth rate.

    The stock already reflects plenty of excitement over new, higher-priced products targeting health conscious Americans. And with anxieties over a slowing economy fading and other soup makers nipping at their heels, Campbell's stock could languish.

    Or as Steven Ralston, an analyst with Zacks Investment Research says, "The risks facing this stock could mitigate the potential rewards."

    Though it remains the undisputed giant in a $5 billion global soup industry, Campbell faces increasing competition in the U.S. from rivals such as General Mills' Progresso soup and cheaper-priced private-label products.

    Ingredient costs, marketing expenses and the launch of a new computerized inventory tracking system could weigh on Campbell's margins next year. And the company could have a hard time pushing through price hikes.

    Meanwhile, a new line of low-sodium soups may take time to catch on with consumers. And another mild winter could hurt soup sales, which normally rise when temperatures fall.

    "We are entering the height of the soup season and strange things can happen," says Zacks' Ralston. "Campbell has competitors, and pricing and promotions can dramatically change the fortunes of one company over another."

    Half owned by the descendents of the man who invented the process for condensing soup, the 137-year-old food company is the world's largest soup maker.

    Though it also hawks Pepperidge Farm cookies, V-8 juice and Godiva chocolates, its namesake soup remains Campbell's biggest business, and its biggest claim to fame.

    The soup brand gained iconic status after artist Andy Warhol decided to paint all 32 varieties of Campbell's soup in 1962. Those works today hang in the Museum of Modern Art in New York City.

    But while Warhol's soup-can art has grown exponentially in value, the company itself hit a financial rough patch earlier this decade when a series of missteps and poor product innovations hurt sales of condensed soup.

    "Campbell got complacent," says Jack Trout, president of Trout & Partners, a Connecticut-based consulting firm. "They had those classic red and white cans that Warhol liked to paint. But people started getting bored adding water to a can of soup."

    Hired in January 2001, Chief Executive Douglas R. Conant overhauled the company, and even went so far as to change its soup-making process to enhance flavor.

    Conant introduced pop-top cans and better-organized supermarket shelves. He jazzed up Campbell's all-American line of soups, added single-serving microwavable bowls and soda can-style cups geared to on-the-go eating habits and ready-to-serve soups packaged in cartons.

    In September, supermarkets nationwide started selling reduced-salt versions of Campbell's most popular soups. And the company is launching restaurant-style refrigerated soups under the brand, StockPot.

    All this work has boosted profits an average of 6% annually over the last five years. And over the next three to five years, profits should climb just slightly faster, according to Thomson Financial.

    "We feel we have made great progress," says Anthony Sanzio, a company spokesman. "Now, we are focused on quality growth, and we do have work ahead of us."

    For investors, the question is whether Campbell can deliver double digit earnings growth," says David Palmer, an analyst with UBS Securities.

    At 20 times projected profits over the next four quarters, Campbell's stock changes hands at a slight discount to the packaged-food industry, according to Thomson Financial.

    Yet Campbell trades well above its five-year median of 17x forward earnings and at a 30% premium to the S&P 500. Moreover, the stock trades at an eye-popping 180% premium to the company's projected long-term earnings growth rate.

    Campbell's Sanzio declined to comment on the company's stock price or valuation, adding only that the company will continue to "focus on meeting financial goals."

    Some analysts argue that given Campbell's successful turnaround, its strong brand recognition and expanding profit margins, the stock richly deserves its premium.

    In September, the company raised its dividend and accelerated a share-repurchase program announced in August, both signs that "management is convinced that its turnaround is complete and progressing well," says Zacks' Ralston.

    So as cold weather descends and soup sales pick up, investments in marketing and new, more profitable and healthier soups could be every bit the boon Campbell predicts.

    Still, Campbell is facing stiff competition. And given the stock's big gains and premiums, hungry investors may choose to leave the soup maker on the shelf, for the time being.

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