This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Campbell Soup Tastes Just Right

Stocks in this article: CPB HRL K POST

NEW YORK ( TheStreet) -- When even good companies can't escape the market's wrath, investors have begun to look for protection. These days, when cash is not being taken out of the market to put back under the mattress, investors have resort to "playing defense."

To that end, over the past several decades Campbell Soup (CPB) has been one of the best defensive plays in the market. Best known for warming up investors' bellies, Campbell also has a long history of decent returns. And this is regardless of whatever adverse conditions the economy may be facing at the time. Accordingly, the track record has afforded Campbell a much-deserved respect.

[Read: Ocwen Shares Look Ripe After Brutal Pullback]

Because of Campbell's "comfort foods," shares are not cheap. They very seldom are. But that doesn't mean decent gains aren't around the corner, given all of the skittishness among other sectors. Plus, when I look at, say, a company like Hormel (HRL), whose stock has surged 50% in the trailing twelve months, I realize that the Street is not as price-sensitive for equities as consumers are during food shopping.

What's more, the recent results from Kellogg (K) and Post (POST), there's no question that the packaged food industry has bottomed. And judging from Campbell's price-to-earnings ratio of 32, which is still 10 points higher than Hormel, there are still hearty expectations here. But can Campbell deliver?

The company will report its fiscal second-quarter results on Friday. The Street will be looking for 73 cents in earnings per share on revenue of $2.27 billion, which would represent a year-over-year revenue decline of close to 3%. But after posting a 2% revenue decline in the November quarter, investors already assume that Campbell will beat this number, especially since it included the recent holidays.

Now, although I have complete faith in the company's management, I didn't come away from the last quarter's conference call feeling the sort of confidence I needed to feel from an already-expensive stock. For instance, Denise Morrison, the company's CEO, which I respect greatly, began the call with an apology, expressing disappointment in the first quarter results. I appreciated the honesty and candor.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs