A better economy is boosting the prospects of this food company, with analysts forecasting double-digit annual growth for the next five years.
US Foods Holding Corp. (USFD)
From Weiss Stock Ratings Heat Maps
Better manufacturing and construction numbers just pushed the Citigroup “economic surprise” index into positive territory, overcoming a funk that started in April and bottomed over the summer. That index follows how data releases match up with market expectations. A positive number means things are going better than expected—thus the “surprise.”
As well, historical studies of the past 25 years suggest that in the final quarter, we could add another 5% on the Dow, more than 5% for the Nasdaq, and 4.4% for the S&P 500. There are no guarantees, but that seasonality is an additional factor working in your favor!
The stocks on our Best Value Stocks Heat Map are stocks that investors have underpriced compared to intrinsic value. If the whole market rises, these stocks should rise even more as investors seek out relative bargains in the mix.
There has been a bit of a chill in the air with the entrance of low-cost behemoth Amazon into the food business via its purchase of Whole Foods Market.
But if anything, the pressure from above should force consolidation. As US Foods Holding Corp. (USFD, Rated “B-”) management notes, 67% of the food distribution market is still local. USFD has 8% of the market. Accordingly, US Foods has been on the acquisition trail, buying F. Christiana in June, Firstclass Foods in April, and SRA Foods in March.
Mike Burnick, Weiss Stock Ratings Heat Maps, published by Money and Markets, a Division of Weiss Research, Inc., www.weissresearchissues.com/weiss-stock-ratings-heat-maps,
1-800-291-8545, October 2017