When it comes to analyzing a company, especially one with many moving parts such as Sanderson Farms (SAFM), you can get quite lost in the various aspects of the business and waste time and analysis on inconsequential parts of the business. While it'd be nice for a business to be running on all cylinders and have every business unit profitable and growing at an adequate pace, this isn't always the case even at the most successful large corporations in the S&P 500. Similar to the movie industry (players like Disney (DIS) and Netflix (NFLX) come to mind), the price for playing is that you must produce many movies because most of them will be flops. But, you should get 1 hit from a group, and that 1 movie will pay for all of the losses and then some.
With a business that dips its toes into multiple commodity-based products like Sanderson Farms does (specifically Big Bird, Chill-Pack Retail, and Small Birds), it can see some segments perform better than others simply from the cyclical nature of these industries. When I say cyclical nature, I'm not referring to the typical bear and bull stock market or the expanding and contracting economy which cycles up and down. I'm talking about the natural price movements that any market experiences, which precipitates primarily from the balance of supply and demand. So, some business segments will perform better than others depending on how supplies, demand, and prices are moving in relation to competitors, and how competitors are either flushed out or new entrants to a market.
As an example, in Fiscal Year 2016, the Fresh Vacuum-Sealed Chicken product category led the way in Net Sales for the company with a 37.9% contribution to Total Net Sales (of $2.8 billion). But in Fiscal Year 2018, the Fresh Vacuum-Sealed Chicken product category dropped to
