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I'm Off the ConAgra Diet

The importance of organic growth is why Campbell Soup (CPB), which is as iconic as any brand on the shelves, has lost investors' trust.

And ConAgra's Ralcorp acquisition -- an expensive deal, by the way -- continues to receive plenty of scrutiny.

Management is working to "adjust the mix." This is another way to say that it is reshuffling merchandise to find the "right pricing strategies."

ConAgra says it wants to "improve the Consumer Foods segments sales and profit performance as fiscal 2014 progresses."

That's all well and good. But given the earnings-per-share revision, it also seems as if management wants to sacrifice near-term margin for long-term growth.

Another issue is the company's operating margins. To the extent that management can synergize Ralcorp quickly enough to cut overlapping costs and bring more efficiency to the operation and grow margins, then ConAgra might deserve some patience.

But those are some pretty bold bets, especially given the company's poor history of execution. So before you get too optimistic, I suggest you read the label.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense.

His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio.

His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

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