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Blue Buffalo Appoints Greg Reinhart as R&D Vice President

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Oct. 25 2016, Published 3:38 p.m. ET

Price movement

Blue Buffalo Pet Products (BUFF) has a market cap of $5.0 billion. It rose 1.3% to close at $25.61 per share on October 24, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.2%, 7.8%, and 36.9%, respectively, on the same day. BUFF is trading 4.8% above its 20-day moving average, 2.1% above its 50-day moving average, and 9.4% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Mid-Cap Growth Index Fund (JKH) invests 0.14% of its holdings in Blue Buffalo Pet Products. The ETF tracks a market-cap-weighted index of mid-cap companies selected by Morningstar based on their growth characteristics. The YTD price movement of JKH was 2.5% on October 24.

The market caps of BUFF’s competitors are as follows:

  • Procter & Gamble (PG): $226.1 billion
  • J.M. Smucker (SJM): $15.1 billion

Latest news on BUFF

Greg Reinhart has been appointed as Blue Buffalo Pet Products’ senior vice president of research and development and will be responsible for upstream technology development, clinical studies, scientific communications, and product innovation.

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Performance of Blue Buffalo Pet Products in 2Q16

Blue Buffalo Pet Products reported 2Q16 net sales of $286.9 million, a rise of 13.0% over the $254.0 million it reported in 2Q15. The company’s gross profit margin and operating income rose 12.9% and 53.9%, respectively, between 2Q15 and 2Q16.

The company’s net income and EPS (earnings per share) rose to $36.6 million and $0.18, respectively, in 2Q16, compared to $22.6 million and $0.11, respectively, in 2Q15. The company reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS of $68.3 million and $0.19, respectively, in 2Q16, rises of 40.5% and 46.2% respectively, over 2Q15.

BUFF’s cash and cash equivalents and inventories rose 22.0% and 4.8%, respectively, between 4Q15 and 2Q16. Its current ratio rose to 6.1x in 2Q16 from 3.7x in 4Q15.

Projections

Blue Buffalo Pet Products has made the following projections for 2016:

  • net sales of $1.1 billion–$1.2 billion
  • gross margin of ~44%
  • adjusted EPS of $0.74–$0.76, excluding costs related to litigation and BUFF’s secondary public offering
  • capital expenditure of $50 million–$60 million
  • effective tax rate of ~37.3%

In the next part of this series, we’ll take a look at Trinseo (TSE).

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