From soup to nuts, Campbell Soup Co. serves a full-course meal to investors. “Due to corporate restructuring and a stock buy-back, fourth- quarter earnings exceeded our expectations,” says Daphne Selby, a financial consultant with Merrill Lynch in New York City.
With brand names like Franco-American, Swanson and Pepperidge Farm, the stock went from $517/8 to $78 1/2 for the 12-month period ending in October of last year. It outperformed our conservative 12-month projection of $55 made when we recommended the stock in November of 1995. If you had purchased $1,000 worth, or 19 shares, of Campbell stock last year you would have made a profit of about $480.
Selby advises long-term investors to hold on to Campbell. Restructuring efforts could save the company $80 million in 1997 and $200 million in 1998. And a $2.5 billion share repurchasing plan was announced in September. “Both these events have an upside potential that would create value in the stock,” adds Selby. Merrill Lynch’s 1997 earnings estimates for the stock have risen from $33/8 per share to $33/4 per share. Campbell is also launching premium innovations such as the fall premiere of soup in glass jars.
Recent stock price: $83 5/8
52 wk high/low: $82 3/4/$49 7/8
P/E ration: 26
As of 10/24/96