Brad Thomas
Founder & Lead Analyst of Wide Moat Research
J.M. Smucker is underrated because its brands, including Jif, Smucker's, Dunkin' packaged coffee, Milk-Bone, Meow Mix and fast-growing Uncrustables, are bought every week regardless of the economy. Coffee costs, supply-chain inflation and an underperforming Hostess deal hurt this year, but fiscal Q4 revenue rose 6% and adjusted EPS 20% to $2.77. It has raised its dividend 28 straight years, keeps the payout under 50% and still trades below its historical valuation. x.comÂ
J.M. Smucker is worth $150 a share, based on normalized next-twelve-month EPS of $10 and the 15x multiple it usually trades at. x.comÂ
Coffee Holding Company remains a favorite deep value idea after a strong quarter that produced $1.15 per share in free cash flow. Sales grew 20% year on year and net income rose 45% to $0.29 a share, and the Empire acquisition looks to be working out well. The company said sales are strong in private label, branded and green unroasted beans. The balance sheet stays strong with no long-term debt, and shareholder equity grew sequentially; no dividend was paid this quarter. x.comÂ
Campbell's outlook is deteriorating. It cut its dividend from 39 cents to 25 cents, lowered guidance and said 2027 looks even worse. x.comÂ
McCormick looks cheap against its earnings, at 8x trailing and 15x next year's versus the 18x packaged-food makers usually get. At 18x next year's $3.30 a share, give or take 12%, fair value is $52.21-$66.44 versus $48.20. The case leans on the forecast, with forward earnings 45% above trailing. A pullback zone sits at $36.25 and the stock would be expensive above $82.40. This is a levels-only read off reported earnings and revenue estimates, with no fundamental work. x.comÂ
Conagra is priced for permanent decline when the market is really pricing in fear, setting up a turnaround. Its brands, including Slim Jim, Duncan Hines and Birds Eye, sit in 90% of American pantries, yet the stock is down 45% from its highs. A director bought $358,500 of stock at the 52-week low, a new CEO arrives June 1 after an 11-year tenure, and a 9.8% dividend yield pays holders to wait. Morningstar puts fair value at $32 versus a $14 price. x.comÂ
Quality dividend stocks look like a great place to be over the next few years as the crowded tech trade unwinds. Per @PeterBerezinBCA, in the early dotcom bust tech crashed while the rest of the market rose, so the hedge for stocks was other stocks. A quality dividend basket holds old-economy, cash-generative businesses at sane multiples, while the index hides 50% of its weight in names at 10 times sales. That outweighs a general dislike of dividends as inefficient, taxable compounding. x.com … Show more
Hershey looks like an obvious short because nearly its entire product line is weak, apart from Milk Duds, classic Reese's, Heath and arguably Twizzlers. If Campbell's trades at 10x earnings, Hershey should trade at about 5x. x.comÂ
Perrigo looks fairly cheap as a yield-reversion play, with an 8% dividend yield on about a 54% payout ratio. The stock has fallen for 10 years after some bad acquisitions, and a sale of its infant formula business would strengthen the case. x.comÂ
Starbucks has been too much of a drag on performance for anyone who bought within roughly the last 13 years, which helps explain why fund managers barely own it. The lack of a traffic rebound is disappointing; the expected bounce from workers returning to offices never came. x.com x.comÂ
Consumer staples should strongly outperform in 2026, one of the year's expected surprises, if the AI bubble bursts. In that scenario circular financing deals unwind, AI capex slows abruptly on return-on-investment worries and power bottlenecks, and depreciation and weaker demand wreck AI earnings estimates. PepsiCo, Coca-Cola, Procter & Gamble and Kimberly-Clark would then materially outperform the Magnificent 7, with PepsiCo beating most staples on better organic unit growth. x.comÂ
