Which Top 5 Food Stock has the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 5 food stocks rank via earnings trends:

Dean Foods Co. (NYSE:DF): Current Price $16.34

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 12,360 11,110 12,120 13,060 11,460
Diluted EPS ($) 1.20 1.38 0.50 -8.59 0.90

Between 2009 and 2011, Dean Foods improved sales every year but profits crashed into the negative. However, EPS in 2012 returned to the black.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 3,296 3,214 3,126 3,143 3,041
Diluted EPS ($) -0.06 0.20 0.30 0.20 0.20

The quarterly numbers from the company are uninspiring with sales and EPS essentially flat over the last four quarters. We’ll look elsewhere…