This Day On The Street
Continue to site
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

Why we cut loose Hillshire Brands

By Ironwood Investment Management

The Ironwood Smidcap Value portfoliohad a very strong month in May, rising nearly 6%. Stocks from the materials and processing, consumer discretionary, and utilities sectors were among the biggest contributors to the outperformance while technology stocks were a slight detractor.

Some of the better performing stocks were Platform Specialty Products (PAH), Office Depot (ODP) and Dynegy (DYN). These stocks were once again strong performers due to their ability to execute, a skill we identified as a potential catalyst for stock price appreciation when we initiated our positions.

Here is an update on some positions we initiated:

Triumph Group (TGI ) operates in three business lines- aerospace structures (67% of revenues), aerospace systems (25% of revenues) and aftermarket services (8% of revenues).

The systems and aftermarket divisions are operating well. The structures business has been under pressure due to military program roll offs and production cuts at Boeing (BA) for commercial aircrafts. Margin improvement efforts are underway in the structures business from cost cuts and a new manufacturing facility that is now up and running. The company's acquisition strategy should help diversify business away from the structures division. The company is also buying back stock.

Recently, activist investor Atlantic Investment filed as a shareholder and has a history of helping mid cap industrials improve operations. Given the cheap current valuation due to the weakness in structures and the multiple opportunities to improve sales, margins and earnings going forward we initiated a position in the name on May 29th.

On the flipside, we sold our position in Hillshire Brands (HSH), a stock we had owned since this portfolio's inception date at the start of 2013. The newly independent company had been spun off from Sara Lee in June of 2012.

We believed the management team would pursue a three-pronged strategy of rationalizing costs to improve margins, investing in innovation and brand-building and pursuing mergers and acquisitions to further drive top-line growth.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%
TSLA $241.80 0.43%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs