CPB Investment Analysis Report & Stock Research, Campbell Soup Company

Campbell Soup Company (CPB)

CPB Stock Report

2-Year Price History

View Larger CPB Chart
NYSE:CPB
$35.38
(11/25 4:01PM)
-0.1%
Open$35.47 Mkt Cap$12.2 Billion
High$35.47 52Wk High$35.61
Low$35.18 52Wk Low$24.63
Volume1.6 Million Avg Vol 10D2.4 Million

CPB Stock Evaluation

Looking at CPB since last week, there has been little movement in price on a percentage basis. Additionally, there haven't been significant revisions to earnings estimates for CPB. Given this, we are maintaining our Undervalued rating. While there may not have been any meaningful changes in either price or earnings outlook, we still want to analyze where CPB is in relationship to its historical fundamentals. Looking at the ratios and multiples described below and throughout this report is the best way to evaluate the strength of CPB's current Undervalued rating.

Recommendation Summary

At Ockham Research, we are always interested in understanding a company from a valuation standpoint, but even the most ardent value investor understands that there is more to the picture than simply valuation. So, we also apply a volatility studies for both the index and individual sectors. We utilize these tools in order to get a more complete picture of the investing environment. So, while most of our report highlights current valuation versus historical norms as well as peer analysis, there is still more going on behind the scenes.

The NYSE has achieved some pretty solid gains in the last twelve months. Interestingly, in regards to CPB, the Consumer Goods sector has actual underperformed the NYSE over this intermediate time period. We believe our Undervalued is still justified by our analysis of historical valuation metrics and our volatility study as well as our sector and peer analyses.

Although the price of CPB went up by 2.83% since 11/14/2009, this has little affect on our final analysis.

As of this report, there have been no meaningful adjustments in cash earnings expectations or guidance in the last week.

CPB Revenue

As a value investing shop, we are interested in seeing how CPB's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 2.36x and the low end of the range at 1.75x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for CPB of 1.55x is well below its normal historic Price to Sales levels. At a price of $34.12, CPB is 25% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

CPB Cash Earnings

Looking at CPB specifically in their Cash Earnings capabilities, Ockham views CPB as significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for CPB to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 16.55 and a 12.24 low over the same period.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for CPB? From the Ockham perspective, we are looking specifically at CPB to see if the market is recognizing the huge disparity between CPB's past stock price to Cash Earnings ratio to today's levels. At a difference of 19% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at CPB. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

CPB Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.

When reviewing dividend yields for CPB, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. CPB’s estimated annual dividend is $1.10 resulting in a current dividend yield of 3.22%. The highest dividend yield from CPB over recent history was 4.47% while the lowest dividend yield was 1.78%. A current dividend yield of 3.04% above the historical median is favorable in our analysis of CPB.

Peer Comparison

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Campbell Soup Company Industry Grouping

(11/25/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding CPB) 20.40 4.94 » 24.42 1.19 0.47 » 1.48 6.36% 24.51%
*10 year range does not include current year values
H.J. Heinz Company HNZ $13.7 Billion $43.35 11.23 7.97 » 18.59 1.15 0.95 » 1.74 3.82% 44.72%
Campbell Soup Company CPB $12.2 Billion $35.38 11.77 7.39 » 15.85 1.55 1.11 » 2.18 1.31% 70.88%
Coca-Cola FEMSA SAB De CV KOF $10.9 Billion $59.25 15.53 5.69 » 17.95 1.95 0.63 » 2.53 13.49% 13.72%
ConAgra Foods CAG $10.0 Billion $22.52 9.63 4.61 » 15.98 0.84 0.35 » 1.16 -2.60% 15.90%
Coca-Cola Enterprises Inc. CCE $10.0 Billion $20.37 48.62 3.67 » 51.05 0.46 0.16 » 0.76 4.70% 34.84%
Fomento Economico Mexicano S.A.B. de C.V. ADS Repr 4 shares FMX $9.8 Billion $45.20 17.00 2.78 » 18.52 1.56 0.29 » 1.21 12.41% 13.38%
VALUATION RATING
CROWD SENTIMENT:
The Latest Financial News
The most recent Stocks on Financial TV & Blogs from impactful financial news sources

CPB in Developing Markets on Zero Hedge

For growth, there is nowhere growing more rapidly than emerging markets. Recently, Zero Hedge talked about emerging markets and their impact on Campbell Soup Company.

Based on our methodology, Campbell Soup Company should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; CPB has received less coverage from the financial media in business television and blogs.

“… Services swings to Q4 loss of $9. 9M as revs declined 42% to $878. 2M. Brocade Communications Q4 profit down 5. 6% at $33. 6M; revenue up 31% to $521. 8M. …”

More News Than Normal on CPB from Zero Hedge

Something important is going on with CPB today, as it is getting a lot of attention on business television and influential blogs.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Campbell Soup Company has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on CPB, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.

“… Calendar: Data on GDP, Consumer Confidence, FOMC Minutes to be released today. Recent Egan-Jones Rating ActionsTECH DATA CORP (TECD)CIGNA CORP (CI)CAMPBELL SOUP CO (CPB)HESS CORP (... …”

More News Than Normal on CPB from Closing Bell

We are observing a lot of attention being paid to CPB in the news, so if you hold the stock you may want to take a look at what is going on.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Campbell Soup Company has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on CPB, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.

“… CAMPBELL SOUP, they raised their guidance for the current fiscal and then ldk solar, one of the stocks we've been talking about, certainly focused over the last hour or so, chines... …”

CPB Having an Active Day in News, Now on Closing Bell

Something important is going on with CPB today, as it is getting a lot of attention on business television and influential blogs.

Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Based on our methodology, Campbell Soup Company should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; CPB has received less coverage from the financial media in business television and blogs.

“… CAMPBELL SOUP raised their guidance for the current fiscal year. The chinese company beat an also guiding above estimates. …”

Countdown to the Closing Bell: CPB is Among Most Active Stocks in the News Today

We are observing a lot of attention being paid to CPB in the news, so if you hold the stock you may want to take a look at what is going on.

Based on our methodology, Campbell Soup Company should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; CPB has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… CAMPBELL SOUP beating the street with their number. Another group to keep an eye on, the pc because gartner saying they raised the 2009 forecast for pc shipments. …”

Earnings News Regarding Campbell Soup Company Noted on The Razor's Edge

CPB's earnings per share was discussed on The Razor's Edge which means there is something significant going on. Profits are the metric we pay the most attention to in our methodology.

We noticed recently that in comparison to all other stocks we analyze in the news; CPB has received less coverage from the financial media in business television and blogs. Based on our methodology, Campbell Soup Company should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… On Monday one of the most anticipated earnings releases was that of the world’s largest soup maker CAMPBELL SOUP’s (CPB) first quarter. …”

CPB's Dividends Mentioned by The Razor's Edge

For income investors, dividend news is obviously important. CPB's dividends were discussed recently on The Razor's Edge.

Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; CPB has received less coverage from the financial media in business television and blogs. Based on our methodology, Campbell Soup Company should hold some appeal to value investors as we view it as Undervalued.

“… The forward looking P/E multiple is a very reasonable 14. 2x. At Ockham, we are reaffirming our Undervalued rating on CAMPBELL SOUP because its valuation remains attractive base... …”

Stocks to Watch: CPB Heavily Covered on The Razor's Edge

Something important is going on with CPB today, as it is getting a lot of attention on business television and influential blogs.

At present, Ockham has a valuation stance of Undervalued on CPB, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Campbell Soup Company has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… CAMPBELL SOUP’s Quarter was Hmm Hm. …”

Be Aware There is Lots of News Today On CPB and This Instance Comes from Street Signs

Something important is going on with CPB today, as it is getting a lot of attention on business television and influential blogs.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Campbell Soup Company has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on CPB, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… Cigna is to the plus side as well as wellpoint and cover CAMPBELL'S soup, their soup . …”

Stocks to Watch: CPB Heavily Covered on The Call

CPB has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Campbell Soup Company has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on CPB, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.

“… You see hmo stocks moving higher as well today on the prospect, really, that the fight over health care reform continues we did have CAMPBELL'S soup as soup sales were down. …”

View All Campbell Soup Company Stock News

Key Fundamentals

CPB - Campbell Soup Company Fundamentals
Price (11/25 4:01PM) $35.38
Volume (11/25 4:01PM) 1.6 Million
Last Close Price $35.40
10 Day Average Volume 2.4 Million
13 Week Price Range $30.63 - $35.61
52 Week Price Range $24.63 - $35.61
LTM Revenue $7.5 Billion
 
Shares Outstanding (07/2009) 345.3 Million
Market Capitalization $12.2 Billion
Shares Held By Institutions 175.5 Million
Institutional Holders 581
% Shares Held By Institutions 50.80%
Earnings Per Share (EPS) $2.05
P/E Ratio 16.10
Book Value Per Share $2.11
 
Gross Margin 43.00%
Annual Dividend 1.10
Dividend Yield 3.10%
Beta 0.33
Fiscal Year Ends July

About Campbell Soup Company

Campbell Soup Company is considered to operate in the Consumer Goods sector. They specifically operate in the Processed/Packaged Goods business segment contained within the Food & Beverage industry.

The Company together with its subsidiaries, is a global manufacturer and marketer of branded convenience food products.