Seeking Alpha
Long/short equity
Profile| Send Message|
( followers)  

Despite a 10% drubbing the DJIA endured the last three weeks, the defensive nature of the Basic Food Fund is proving its mettle, as the index shed a mere 2% from $153.44 to $150.05, while the overall market was torpedoed five times harder.

Component update: Imperial Sugar (NASDAQ:IPSU) got sweetened when Sidoti & Co raised its outlook from a neutral to a buy. The company also experienced one of its heaviest trading days on record (on 1/21), rallying 6% on more than 1.1 million shares (eight times average daily volume). Technical junkies might get giddy, as they are proponents of the ideology that volume always precedes price. We will see what happens. The company’s annual shareholder’s meeting is scheduled for today, possibly providing additional tidbits of valuable information.

Tyson (NYSE:TSN) cuts production: Even though TSN reported results below expectations, the stock rallied nicely on an improved outlook. Analysts had been clamoring for a poultry production cut, and that is what they finally received, when TSN confirmed production was cut 5% last December. The company said higher prices and reduced input costs will enable them to get back to profitability within the next two quarters. S&P analyst Joe Agnese raised his target price 25% from $8 to $10, citing the attributes of production cuts, bringing supply more in line with demand.

Jet Blue (NASDAQ:JBLU): The airline is scheduled to report fourth quarter results on Thursday, Jan 29. Consensus of estimates is a 2 cent loss on revenues of $808 million. The company could beat estimates, if it was were not too aggressive in its fuel hedging activities.

ConAgra (NYSE:CAG): The stock has been on a tear after Jim Cramer touted the shares in his piece, titled, “Sell Block: Time to Spring ConAgra”? Time to jump on the bandwagon?

Pep Boys (NYSE:PBY): The shares are starting to show signs of stabilization after a nasty selloff. Yesterday, ARGUS Research reiterated its buy opinion, while Global Hunter Securities initiated research coverage with a buy rating and a $5.50 target price.

We believe Pep Boys has high earnings growth potential through both increased revenues and operating margin expansion. We are initiating coverage of Pep Boys with a Buy rating as we believe the company has high earnings growth potential through both increased revenues and operating margin expansion. The company is well positioned to benefit from increased demand for replacement parts and maintenance services as new car purchases are deferred due to higher unemployment and tight credit, causing more wear and tear on existing vehicles. Additionally, we believe the company’s asset-rich balance sheet offers plenty of financial flexibility as the company executes its growth plan. We are establishing a price target of $5.50 per share, which equates to 5x our FY2009 EBITDA estimate.

Bridgford (NASDAQ:BRID): The company is scheduled to report fourth quarter results by Friday, Jan 30th. Look for a loss of 10 cents on revenues of $34 million.

Sara Lee (SLE): The company is expected to generate earnings of 21 cents on sales of $3.4 billion when it reports second quarter results next Wedneday. A Business Week article titled “CEO Pink Slip Watch” listed CEO Brenda Barnes as vulnerable for replacement.


Source: Basic Food Fund Holds Its Own