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3 Hog & Poultry Farm Stocks That Evaded the Wrath of Irma


The most powerful Atlantic Ocean hurricane, Irma, tore through the French Caribbean island territories, wrecking telecommunications systems and roads. However, Hurricane Irma was comparatively less forceful in Florida and weakened to a Category 1 storm as it made its way across land masses.

Notably, the eye of the storm missed Miami and gradually lost its energy once it went across the highly unpopulated Everglades. Hurricane Irma was then downgraded to a tropical storm.

Nonetheless, disaster modeling software company — AIR Worldwide — estimates losses stemming from the hurricane to be between $20 billion and $40 billion. Per the Guardian, “the economic cost of Hurricane Irma could rise as high as $300 billion” as it withered households, businesses as well as farms over its course.

Hurricane Irma placed producers of hogs and chicken in the United States at risk. Though birds are majorly raised indoors, poultry facilities require steady supply of feed and electricity. In addition, processing related activities of these farms slow down during such calamities, if the animals cannot be promptly transported to safer areas.

Farms Had Braced Up for the Worst

The hog and poultry firms had taken a number of measures to protect the processing facilities and animal herds from the devastating impact of hurricane Irma.

The cattlemen at these farms were instructed to open up fences and move up animals to higher grounds or wooden areas, which could offer relief from strong winds. The farms also ensured that the grain bins had additional feed, in case the roads were washed out due to heavy rains.

Moreover, these farms made sure that the backup generators of the facilities were equipped with adequate fuel.

However, we notice that certain plants were even shut down on account of the storm severity.

Zacks Counsel

The three hog and poultry stocks listed below seem to be safe investment bets even in the face of Irma-induced challenges. These stocks not only enjoy bright prospects, but are also currently performing better than the industry average.

Pilgrim's Pride Corporation PPC produces, processes and markets frozen, fresh and value-added chicken products. The company distributes these products to retailers and foodservice operators in the United States, Puerto Rico and Mexico.

The company currently sports a Zacks Rank #1 (Strong Buy) and carries a VGM Score A. Over the last 60 days, the Zacks Consensus Estimate for the stock moved 18.2% upward to $2.40 per share for 2017.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of this stock yielded a return of 15.7%, outperforming 3% growth recorded by the industry, in three months’ time.

Notably, the stock’s projected sales growth is 8.6% and earnings per share (EPS) growth is 37.1% for 2017 compared to the respective tallies of 1.5% and 26.6% estimated for the industry.

Pilgrim's Pride believes elevated sales of organic and antibiotic-free chicken products, as well as higher exports will likely boost results in the quarters ahead. The company is also trying to reinforce its competency on the back of strategic acquisitions. Constant attempts to launch innovative product categories (like fully cooked sausages under the Gold'n Plump brand) and improved operational efficacy are also anticipated to strengthen the competency of this company in the near term.

Sanderson Farms, Inc. SAFM is a renowned integrated poultry processing company. It processes, markets and even distributes fresh prepared and frozen chicken products across the United States.

The company currently flaunts a Zacks Rank #1 and carries a VGM Score A. In the past 60 days, the Zacks Consensus Estimate for the stock moved 28.6% north to $13.07 for fiscal 2017.

Shares of this company yielded a return of 17.1%, outperforming 3% growth registered by the industry, over the last three months.

Notably, the stock’s projected sales growth is 18.8% and EPS growth is 56.1% for fiscal 2017 compared to the respective tallies of 1.5% and 26.6% estimated for the industry.

The company ensured that it had taken adequate measures to protect its Georgia and North Carolina facilities from the adverse impact of Hurricane Irma.

The company has a robust long-term outlook and believes escalating market prices of fresh chicken products (such as bulk leg quarters, boneless breast meat and jumbo wings) will likely drive its top- and bottom-line growth in the upcoming quarters.

Sanderson Farms also intends to boost its near-term financials on the back of increased productivity. The company announced that its new North Carolina facilities will deliver maximum production in January 2018. In addition, it noted that the construction of the new facility in Texas is slated to commence this September and will further reinforce its aggregate productivity in the quarters ahead. Sanderson Farms anticipates to begin processing at the Texas plant from the first quarter of calendar-year 2019.

Tyson Foods, Inc. TSN, along with its subsidiaries, operates as a premium multinational food company. Chicken, pork, beef and prepared foods are the four major operating segments of the company.

It currently carries a Zacks Rank #3 (Hold) and holds a favorable VGM Score A. The Zacks Consensus Estimate for the stock inched up 0.6% to $5.09 for fiscal 2017 in the past 60 days.

Over the last three months, shares of this stock yielded a return of 5%, outperforming 3% growth recorded by the industry.

Notably, the stock’s projected sales growth is 3% and EPS growth is 16% for fiscal 2017 compared to the respective tallies of 1.5% and 26.6% estimated for the industry.

Tyson Foods shut down its plants in Georgia and Florida this Monday due to Hurricane Irma.

However, the company noted that it would soon resume operations at its chicken facilities in Cumming, Dawson and Vienna, Georgia, as well as the beef facility in Jacksonville.

Increased geographical and product diversity are expected to bolster Tyson Foods’ near-term results. Furthermore, the acquisition of AdvancePierre (June 2017) is anticipated to fortify the company’s fastest growing portfolio of protein packed and prepared foods brands. Strong innovation also remains a major growth propeller for the company.

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