You might not be familiar with ConAgra Foods (NYSE:CAG) — the packaged food giant with a market cap of more than $10 billion and annual sales of more than $12 billion — but you almost certainly have some of its products in your kitchen.
After all, it’s darn hard to eat in America without buying at least one of the company’s well-known brands. See if any of these ConAgra-owned names ring a bell, and you’ll see what we mean: Act II, Banquet, Blue Bonnet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt’s, Marie Callender’s, Orville Redenbacher’s, Pam, Peter Pan, Reddi-wip, Slim Jim, Snack Pack, Swiss Miss, Van Camp’s, Wesson.
However, being one of the nation’s biggest food companies hasn’t been easy during the downturn. Yes, ConAgra is in the defensive sector of consumer staples, which should be good for its stock. The problem is that cash-strapped consumers are trading down from brand names to less expensive store-branded and generic products. Higher input costs haven’t helped either.
That’s caused ConAgra’s stock to languish for the first half of 2012, but there is cause for optimism. Sales are rising and margins are expanding, too, helped by higher prices that are sticking with consumers.
The company, founded in 1919, employs more than 22,000 people. With most of its sales coming from North America, ConAgra is intimately entwined with the U.S. economy.
When consumers go back en masse to buying their favorite brands, it’ll boost the stock — and you’ll know the recovery has really turned a corner.
Check out the complete list of Real America Index components, along with an interactive map of short-term and long-term returns.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.