Friday, November 1, 2013

Pinnacle Foods?

Since its inception, this website has dominated the major search engine (Google, Yahoo, Bing, etc.) results for "pf stock". A few months ago this started to change. So, who has been muscling in on my turf? It seems that a company by the name Pinnacle Foods with the stock symbol "PF" went IPO back in March of this year. Since then, has dropped in the search results. This all seems a bit unfair since PFStock (the blog) has been around for over 6 years longer than PF (the stock symbol).

Although the company only recently went public, Pinnacle Foods owns such well-known brands as Duncan Hines, Log Cabin, and Birds Eye. While brand names are important, I usually like to evaluate a stock based on its fundamental strengths. One key criteria that I use to decide on purchasing a particular stock is its price-to-earnings (P/E) ratio. Pinnacle Foods (NYSE: PF) currently has a P/E ratio of 54.

I compared this P/E ratio against a couple of Pinnacle Foods of competitors in the food products industry. These were Conagra Foods and Mondelez (formerly known as Kraft). Conagra (CAG) has a P/E ratio of 20; Mondelez (MDLZ) has a P/E ratio of 26.

Comparatively, PF stock is expensive within its industry group.  So, I don't think that I will be buying PF stock anytime soon.

Disclosure: I don't currently own any shares in CAG, MDLZ, or PF stock.