Hormel Foods Corp (NYSE:HRL) has seen four different insiders sell shares in the past month, so let’s take a closer look at the most recent insider selling. Director Elsa A. Murano sold 6,000 shares on Wednesday for $43.00 each, cutting her ownership position to 60,767 shares. Furthermore, Thomas R. Day, Group Vice President of Refrigerated Foods, reported the sale of 10,000 shares that occurred exactly three weeks ago, all of which were held by his spouse’s irrevocable trust. The 10,000 share-block was sold at $44.00 apiece. Mr. Day also holds a direct ownership stake of 4,758 shares, along with an additional 18,372 shares held via a 401K Plan and 17,033 shares through JEPST Plan.
As the name suggests, Hormel Foods is a processor of branded and unbranded products for retail, foodservices, and fresh product customers. The company’s shares have advanced by 200% in the past five years and by 47% in the past year alone, which makes us believe that insiders are taking some profits off the table. In November, the company’s Board of Directors authorized a two-for-one split of its voting common stock, with the shares beginning to trade at the post-split price in early February Although this move does not change anything for long-term shareholders, save for the number of shares owned, swing traders, day traders and other short term-oriented investors will mostly likely benefit from increased liquidity.
Hormel Foods conducts its business operations through five main segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The company’s net sales for the first quarter of fiscal year 2016 that ended January 24 totaled $2.29 billion, down from $2.40 billion reported for the same period of the prior year. The company’s Refrigerated Foods segment, which accounted for 51% of total net sales in the fiscal first quarter, was the only segment that registered a year-over-year increase in net sales, to $1.16 billion from $1.14 billion, mainly due to the acquisition of Applegate in July, which contributed $76.3 million to net sales. In the meantime, the stock is priced at around 26.3-times expected earnings, versus the forward P/E ratio of 21.2 for the Packaged Foods sector. Almost every food company trades around 20-times earnings, with competitor Tyson Foods Inc. (NYSE:TSN) trading at 15.9-times earnings and ConAgra Foods Inc. (NYSE:CAG) at 18.7-times expected earnings. Dmitry Balyasny’s Balyasny Asset Management acquired a new stake of 507,339 shares in Hormel Foods Corp (NYSE:HRL) during the December quarter.
Follow Hormel Foods Corp (NYSE:HRL)
Follow Hormel Foods Corp (NYSE:HRL)
Disclosure: None
