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Sanderson Farms Rose 3% after Fiscal 4Q15 Earnings Results

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Stock price performance

Sanderson Farms (SAFM) reported its fiscal 4Q15 earnings results on December 17, 2015. The stock rose by 3% after the earnings release to close at $75.0. It increased another 2% the next day and closed at $76.35 on December 18. Its price movements on a month-to-date and year-to-date basis are 2.1% and -8.4%, respectively.

The stock almost touched $100 in 2014 owing to strong chicken prices and lower feed grain costs. The shares fell towards the mid-60s in fiscal 2015. The stock was following a declining trend up to the fiscal 3Q15 earnings release due to chicken pricing fears. However, it rose ~4% after the third quarter earnings release to close at $70.24. Since the third quarter earnings release, the stock has been rising.

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The stock rose by 7% on December 3, reacting to positive comments from analyst firm CLSA Americas that the poor performance in the chicken commodities market could finally hit the bottom and see a turnaround soon. The stock has fallen ~8% since the beginning of the calendar year 2015 as of December 21 when it closed at $76.41. The Advisor Shares Trim Tabs Float Shrink ETF (TTFS) invests 1.1% of its portfolio in Sanderson Farms. It closed at $54.06 on December 21.

Performance of peers

The company’s peers in the industry are Pilgrim’s Pride (PPC), Hormel Foods (HRL), and Tyson Foods (TSN). They closed at $21.9, $79.6, and $53.1 on December 21, respectively. The positive comments from CLSA Americas also affected the performance of competitors’ stock. Pilgrim’s Pride rose by as much as 6% on December 3. Tyson Foods rose by ~2% on the same day.

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 3.1% of its portfolio in Tyson Foods. RHS closed at $114.79 on December 21.

Series overview

In the next part of the series, we’ll discuss moving averages of Sanderson Farms and its peers. We’ll also discuss the company’s performance in fiscal 4Q15, its new plant, and its regular and special dividend.

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