TOSHTMLTITLE

Dean Foods Company : DF

Dean Foods Company, a food and beverage company, processes and distributes milk, and other dairy and dairy case products in the United States. The company manufactures, markets, and distributes various branded and private label dairy, and diary case products, such as fluid milk, ice creams, cultured dairy products, creamers, ice cream mixes, and other dairy products; and juices, teas, bottled water, and other products. It sells its products under approximately 50 national, regional, and local proprietary or licensed brands, and private labels, including DairyPure, TruMoo, Alta Dena, Berkeley Farms, Country Fresh, Dean's, Friendly's, Garelick Farms, LAND O LAKES, Lehigh Valley Dairy Farms, Mayfield, McArthur, Meadow Gold, Oak Farms, PET, T.G. Lee, Tuscan, and others. The company sells its products to retailers, distributors, foodservice outlets, educational institutions, and governmental entities through its sales forces. Dean Foods Company was founded in 1925 and is headquartered in Dallas, Texas.

Analysis : DF

  • Dean Food (DF) reported its 4th quarter earnings on February 27th, 2019 and disappointed its investors with poor earnings. Wall street was expecting an EPS of -$0.27 on a revenue of 1.9 Billion. The company reported -$0.50 on a revenue of 1.9 Billion. The stock price lost 30% of its value post earnings.

  • DF stock price has been on a decline for several quarters. This stock was valued at $22 as of Jan 2017. The stock price tumbled to $12 by Jan 2018 and is now trading less than $3. DF's stock price accelerated its bearish path after its 3rd quarter earnings of 2018 (Earning Surprise was -366%). The company's CEO recently mentioned that he will be considering "a range of potential strategic alternatives to enhance shareholder value." This statement may be interpreted as a potential for the company to be sold (or parts of its division). Dean Foods Company has a market capital of 263.37M and has 91.45M of outstanding shares. P/E is -288.00 and pays no dividend at this time.

  • Having said this, where is the stock heading from here? Would the same downward momentum continue?. While the stock is bearish and has demonstrated a strong downward trend, our proprietary pattern recognition system sees an immediate consolidation of its price movement. This stock has likely entered an oversold region. Here are some statistics:

  • The Relative Strength Index (RSI) , a momentum oscillator developed by J. Welles Wilder, measures the speed and change of price movements. The RSI has a range between 0 and 100. Traditionally, the stock is considered overbought when RSI is above 70 and oversold when it is below 30. RSI of Dean Foods Company as of 3.0 is 20. Most recent entry of Dean Foods Company into the oversold territory was on 12/10/2018 and overbought territory was on 05/11/2018.

  • "Buy/Sell" volume ratio is a proprietary indicator that measures the buy and sell volume of a security. This represents the strength of the move in either direction. This oscillator ranges between 0 and 100, however the characteristics widely differ based on the trading volume and momentum. For Dean Foods Company the oversold and overbought is fixed at 78 and 10.

  • Another important volatility indicator to consider is the 14 day ATR (Average True Range) . Average True Range is not a directional indicator and it represents the energy behind the move. Beta coefficient (β) measures the volatility of a stock with respect to the market. Beta for Dean Foods Company is (3Y Monthly) 0.35.

  • The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows: Current ratio = Current Assets/Current Liabilities. If the value is less than 1, it means that the current liabilities exceed current assets and vice versa. As of Dec 31,2018 current ratio for DF is 1.3.

  • Despite all, DF is in food and beverage business that has direct impact on consumers. Its current quarterly revenue is 1.9 Billion

  • For reasons explained below, we believe this stock is undervalued and oversold. There is a high probability for this stock to make an upward move (10%) from its current price.

  • We are an investment research organization specializing in financial market analysis and simulation modeling. Our specialty includes financial research & market analysis, financial system thinking, mathematical modeling of trading patterns and near time price prediction of a registered security. We are not a registered investment advisor or a financial advisor or a brokerage firm or an investment company. Please read our disclaimer at http://www.theoryofstocks.com/US/Home/index.php/disclaimer.

  • Financial information cited in this article are taken from Yahoo Finance (http://www.yahoo.com/finance); EPS data is taken from Zacks Research (http://www.zacks.com); some of the definitions have been taken from Wikipedia (www.wikipedia.com)

     

    Recent Success

    Login/Register

    Research Articles

    JSN Epic template designed by JoomlaShine.com