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Why ConAgra Is Worth a Taste


The food company may be headed for a new high.


For me the week is winding down rapidly. Because of the holiday, today is my last day until Monday and I'm pretty darn excited. My batteries need recharging and I'm looking forward to spending time with the family.

Asian stocks rose overnight. The Hang Seng and the Nikkei were up 1.12% and 1.91%, respectively. European stocks were in positive territory early this morning, too. And here in the US we're currently trading higher.

Here's what I'm seeing this absolutely bitter cold but beautiful Wednesday morning:

Time for it to crack open the wallet?

I like what I'm seeing from ConAgra. Not only did it beat EPS expectations in its most recently reported quarter but its stock has been performing well, plus a recent article on Bloomberg caught my eye because in it was the following:

The maker of Hebrew National hot dogs and Orville Redenbacher's popcorn could announce a stock buyback of as much as $660 million, given the company's operating cash flow, said Credit Suisse Group AG analyst Robert Moskow. Such a share repurchase would boost ConAgra earnings per share by 6% and would probably lift the stock by a similar amount, he wrote in a note.

My two cents:

I think the shares could reasonably make a new high over the next few weeks given the recent earnings. A buyback would be icing on the cake. By the way, with these guys expected to put up $1.72 a share this year, I think the stock could reasonably go to the high $20s and maybe $30 or more.

Jabil Circuit (JBL):
The Florida-based electronic parts company saw its stock get a sweet little goose in yesterday's session and for good reason. It's coming off a better-than-expected first quarter and offered up a decent picture as far as the second quarter is concerned.

Some more thoughts:

The stock has clearly had a nice run since the spring time. But given the recent earnings, the outlook, and the solid growth that's expected from this year to next year on the bottom line, I think that there is still some room to run.

For my last take on Jabil, see Jabil Circuit Wins Across the Board.

Yahoo (YHOO):
In Upgrades and Downgrades, Justin Sharon points out that Morgan Stanley slapped an Overweight rating on the stock.

Some quick thoughts on the Cali-based company:

1. The recent pullback from the highs certainly catches my eye in a pretty big way. In a nutshell I'm optimistic that in 2010 the company/stock will win new followers as folks realize this comeback is the real deal.

2. I also want to point out that I remain a big fan of Carol Bartz and think she and the Yahoo board will be working "OT" to make sure the stock gets its due.

3. Just as an aside, anyone else out there notice that the estimates for this year and next have ticked up a little over the last 30 days?

Corning (GLW):
The skinny is that ThinkEquity upped its rating to Buy.

My two cents:

1. As many of you know, I'm pretty jazz hands on the stock. This news only makes me feel more confident that the shares could head into the low- to mid-$20s.

2. One thing though, keep in mind that it has had a good run and a near-term breather may not be out of the question.

Have a great day! And for those celebrating, have a terrific holiday!

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No positions in stocks mentioned.

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