Smithfield Foods Inc. (SFD): Today's Featured Food & Beverage Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Smithfield Foods ( SFD) pushed the Food & Beverage industry lower today making it today's featured Food & Beverage laggard. The industry as a whole closed the day up 0.2%. By the end of trading, Smithfield Foods fell 41 cents (-2.1%) to $19.12 on average volume. Throughout the day, 2.2 million shares of Smithfield Foods exchanged hands as compared to its average daily volume of 2.8 million shares. The stock ranged in price between $18.97-$19.52 after having opened the day at $19.52 as compared to the previous trading day's close of $19.53. Other companies within the Food & Beverage industry that declined today were: Agria Corporation ( GRO), down 4.4%, Jones Soda Company ( JSDA), down 3.9%, Le Gaga Holdings ( GAGA), down 3.8%, and Central European Distribution ( CEDC), down 3.7%.

Smithfield Foods, Inc., together with its subsidiaries, engages in the production and marketing of fresh meat and packaged meat products in the United States and internationally. Smithfield Foods has a market cap of $2.91 billion and is part of the consumer goods sector. The company has a P/E ratio of 8.8, above the average food & beverage industry P/E ratio of 8.5 and below the S&P 500 P/E ratio of 17.7. Shares are down 20.3% year to date as of the close of trading on Friday. Currently there are three analysts that rate Smithfield Foods a buy, two analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Smithfield Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the positive front, Seneca Foods ( SENEB), up 15.1%, Tianli Agritech ( OINK), up 11.4%, Reeds ( REED), up 8%, and Bridgford Foods Corporation ( BRID), up 7.7%, were all gainers within the food & beverage industry with Archer-Daniels Midland Company ( ADM) being today's featured food & beverage industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the food & beverage industry could consider PowerShares Dynamic Food & Beverage ( PBJ) while those bearish on the food & beverage industry could consider PowerShares DB Agriculture Sht ETN ( ADZ).
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