Friday, November 1, 2013

Pinnacle Foods?

Since its inception, this website PFStock.com 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, PFStock.com 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.

PFS

2 comments:

  1. Buying a stock has always been difficult. You should know the company and it's processes to deeply relate on the business level. By that, you will be able to monitor the growth of the share.

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  2. Nice read! Always a pleasure reading! Thank you for sharing!
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