J.M. Smucker: Quality On The Cheap Side Of Fair Value

dividend growth investing | stock analysis | minimum acceptable rate of return

J.M. Smucker Company (SJM) is now much more than its namesake would suggest.  Of course there's still the fruit spreads, peanut butter and other food products; however, that only accounts for roughly 21% of sales now and it just the 3rd largest division at Smucker.  The largest segment by revenues is pet foods which is roughly 38% of sales followed by retail coffee at 28% with international making up the remaining 14%.

Smucker's share price has largely gone nowhere over the last 5 years growing roughly 12% in that time.  After topping out in the summer of 2016 shares are down approximately 28% as of Tuesday's close.  More recently shares are down ~12% since mid-May.

That kind of stagnation in the share price gets my attention as it could be a situation where the business is doing just fine, but hte stock previously got ahead of itself.  It's akin to pushing against a spring; at some point the spring will push back.

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