Amid a sea of red in global financial markets today, there are some pockets of green worth exploring. Tyson Foods (NYSE:TSN) is one such stock that’s moving higher today, with TSN stock appreciating more than 3% after the company reported its third-quarter earnings.
Tyson noted that an adjusted net income of $309 million and strong quarterly sales of $13.35 billion (both above analyst estimates) signal that a positive turnaround is underway for the large-cap U.S. meat company. The company reported strong sales growth in its beef, pork and prepared foods segments, which helped to offset one-time costs related to plant closures and contingency accruals for litigation.
Let’s dive more into these numbers and what they may mean for investors.
TSN Stock Moves Higher on Red Day for Markets
On days like today, finding any sort of silver lining can be an important goal for investors. Tyson Foods is typically a very boring stock to follow, with the company’s stock among the lower-beta options in the market. Indeed, that’s a key reason why so many investors own the stock.
Today’s move certainly highlights some of the lack of correlation TSN stock provides relative to the broader indices. The stock’s strong underlying fundamentals are supporting this move higher. After today’s bounce, TSN stock still trades at a relatively reasonable 16 times forward earnings, making this a potential turnaround play certain investors are clearly interested in.
In this market, value stocks are more likely to garner outsized interest from investors. Additionally, if this market rotation away from mega-cap stocks into other mid- and small-cap names continues, Tyson’s recent momentum could certainly have some legs. Given the outsized nature of today’s move, it does appear some investors are betting this will be the case.
I’m not sure how sustainable today’s move will be in terms of predicting the future performance of this industrial name. But for now, the market does appear to hold a favorable view of the future cash flow growth potential of this stock. On a fundamental basis, I’d say today’s move in TSN stock makes sense, and this will be a stock I keep an eye on from here.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
