The following video is from Thursday's Investor Beat, in which host Chris Hill, and analysts Jeff Fischer and Jason Moser dissect the hardest-hitting investing stories of the day.
Shares of PepsiCo (NYSE: PEP ) hit an all-time high on Thursday in the wake of quarterly earnings, and the strength in its snack division. Shares of Verizon (NYSE: VZ ) gain after the company reports a 16% jump in quarterly profits. Shares of Union Pacific (NYSE: UNP ) hit an all-time high, as first quarter profits rose 11%. And shares of eBay (NASDAQ: EBAY ) slip over concerns about earnings guidance. In this installment of Investor Beat, our analysts discuss four stocks making moves.
PepsiCo has quenched the thirst of consumers for more than a century. But recently, the company has left shareholders craving more. With increased competition and loss of market share, many investors wonder if this global snack food and beverage giant is simply fizzling out. Are more bland results ahead for PepsiCo? The Motley Fool's new premium report on the company guides you through everything you need to know about PepsiCo, including the key opportunities and threats facing the company's future. Simply click here now to claim your copy today.
Top Food Companies To Buy For 2015: KBB Resources Bhd (KBB)
KBB Resources Berhad is an investment holding company. The Company is engaged in manufacturing and marketing of all types of rice and sago sticks (vermicelli), sago starch and related products. The Company�� product includes Rice Vermicelli, Instant Noodle, Instant Bihun, Laksa and Sago. The Company�� subsidiaries include Kilang Bihun Bersatu Sdn Bhd, which is engaged in Manufacturing and marketing of all types of rice and sago sticks (vermicelli); Rasayang Food Industries Sdn Bhd, which is engaged in manufacturing and trading of beehoon and beehoon laksa; Bersatu Noodles Industries Sdn Bhd, which is engaged in manufacturing and trading of noodles and related products, and Bersatu Biotechnology (Johore) Sdn Bhd, which is engaged in manufacturing and marketing of all types of sago starch and related products.
Advisors' Opinion: - [By Neha Marwah]
LMC Automotive expects the annualized rate to be 16.1 million, the best in six years. This is a decent improvement from last year�� November, when the industry reported 15.3 million as the adjusted annualized rate. In comparison, Kelley Blue Book (KBB) expects the November 2013 SAAR to be around 15.6 million, while Edmunds.com estimates it to be 15.7 million.
Top Food Companies To Buy For 2015: Sao Martinho SA (SMTO3)
Sao Martinho SA is a Brazil-based holding company primarily engaged in the sale and production of sugar and ethanol. It is engaged in the cultivation of sugar cane and production and sale of sugar, ethanol and other sugar cane products. The Company is also involved in the cogeneration of electricity and cattle breeding, as well as the provision of agricultural products. The Company produces hydrous ethanol, anhydrous ethanol, industrial ethanol, ribonucleic acid, fuel oil, yeast, sugar and sugarcane biogases, used to generate steam and electricity. Through its subsidiary Omtek, the Company produces ribonucleic acid (RNA) sodium salt, which is used in the pharmaceutical and food industries as a raw material and flavor enhancer. The Company operates through a numerous subsidiaries, including Vale do Mogi Empreendimentos Imobiliarios SA, SMA Industria Quimica SA, Usina Santa Luiza SA, Sao Martinho Energia SA and Santa Cruz SA, among others.
Advisors' Opinion: H. J. Heinz Company manufactures and markets food products for consumers, and foodservice and institutional customers in North America, Europe, the Asia Pacific, and internationally. The company primarily offers ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition, and other food products. It sells its products through its sales organizations, independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience stores; bakeries; pharmacies; mass merchants; club stores; foodservice distributors; and institutions, including hotels, restaurants, hospitals, health-care facilities, and government agencies. The company was founded in 1869 and is based in Pittsburgh, Pennsylvania.
Advisors' Opinion: - [By Dan Carroll]
Pediatric nutritional products, in particular, are growing at a fast clip. The business grew worldwide sales by a whopping 20% in the quarter, strong growth for what's become a hot market around the world. Competition waits for Abbott, particularly in the Latin American market, where Heinz (NYSE: HNZ ) has particularly been successful in growing baby food sales in countries such as Mexico.
- [By Ong Kang Wei]
And that, unmistakably, is a brand. Although the value of a brand is intangible and cannot be measured in dollars, it is one of the most valuable assets a company can have. This is what differentiates a product from Coca-Cola (KO), Kraft Foods Group (KRFT), Nestle (NSRGY.PK) or McDonald's (MCD) from just another unknown manufacturer of these very much essential goods and services. In my eyes, brands are as good as a promise to consumers, which differentiates the product from the rest, and promises that the standard of that certain product will be much better than that of another manufacturer. Without this brand that people trust in and are loyal to, there will not be substantial profits and future growth for the company. Do you think Warren Buffett would have bought out Heinz (HNZ) without its world-famous brand name? Definitely not! It would be as good as just another ketchup brand left on the shelf.
- [By Matt Koppenheffer]
On negative implications of the H.J. Heinz� (NYSE: HNZ ) �deal.�A questioner wondered whether Berkshire's preferred position in the Heinz deal and the high price paid suggested that Buffett isn't optimistic about the returns available in the market. Buffett responded simply that that was "totally inaccurate." Munger later added on: "As you said, the report was totally wrong."
- [By Ploutos]
U.S. Stocks
The S&P 500 (SPY) makes a new all-time high, but closes beneath that plateau for the year. The S&P 500 eclipsed its former all-time high close of 1565 on March 28th, faster than I anticipated. With the index now ending the week above 1700 for the first time, closing below 1565 for the year seems a distant memory. Not everyone was calling for a new all-time high to be reached in 2013, and investment bank equity analysts were targeting on average high single digit annual gains at the beginning of the year. I did not expect a 19.9% return through the beginning of August, but I will take it. Grade: BThe equal-weighted S&P 500 (RSP) outperforms its capitalization-weighted alternative. The equal weighted index has produced a total return of 23.34%, besting the market capitalization-weighted S&P 500. Long-time readers know that I have long extolled the virtues of equal weighting. The lagging performance of former top holding Apple (AAPL), which has 1/14th of the weight in the equal weighted index has contributed to the outperformance of the equal weighted strategy. Grade: AThe Russell 2000 (IWM) outperforms the S&P 500 as small caps outpace large caps. The Russell 2000 has bested the S&P 500 by nearly five percent with the small cap index producing an impressive 24.8% return year-to-date. Grade: AThe shares of Bank of America (BAC) outperform J.P. Morgan (JPM) and Wells Fargo (WFC) on both an absolute and risk-adjusted basis. Bank of America has outperformed the broader market, producing a 28% total return year-to-date, but it has lagged Wells Fargo (32.1%) and J.P. Morgan (31.1%) while exhibiting higher volatility. Grade: C-The banking sector (XLF) outperforms the S&P 500. The Financial Selector Sector SPDR has produced a 27.9% year-to-date, besting the S&P 500 by roughly 8%. Grade: AHomebuilders (XHB) outperform the S&P 500, but not when adjusting for their variability of returns, which is over twice that of the broad
Top Food Companies To Buy For 2015: Safeway Inc.(SWY)
Safeway Inc., together with its subsidiaries, operates as a food and drug retailer in North America. The company operates stores that provide an array of grocery items, food, and general merchandise, as well as features specialty departments, such as bakery, delicatessen, floral, and pharmacy, as well as coffee shops and fuel centers. It also offers SELECT line of products that include baked goods, sparkling ciders and lemonades, salsas, whole bean coffees, frozen pizzas and entrees, and fresh and dry pastas and sauces, as well as an array of ice creams, hors d'oeuvres, and desserts; O ORGANICS line, which comprises milk, chicken, salads, juices, and entrees; Lucerne line of dairy products; Eating Right line of better-for-you products; Bright Green line of home care products; Total Pet Care line of pet foods and pet care products; and Value Red line of value-priced paper goods. As of December 31, 2009, Safeway operated approximately 1,725 stores in California, Oregon, Wash ington, Alaska, Colorado, Arizona, Texas, the Chicago metropolitan area, and the Mid-Atlantic region, as well as British Columbia, Alberta and Manitoba/Saskatchewan. In addition, the company owns and operates GroceryWorks.com Operating Company, LLC, an online grocery channel, doing business under the names Safeway.com, Vons.com, and Genuardis.com; and Blackhawk Network Holdings, Inc., which provides third-party gift cards, prepaid cards, telecom cards, and sports and entertainment cards to North American retailers for sale to retail customers. Additionally, it engages in gift card businesses in the United Kingdom, France, Mexico, and Australia. Further, the company, through a 49% ownership interest in Casa Ley, S.A. de C.V. operates 156 food and general merchandise stores in Western Mexico. The company was formerly known as Safeway Stores, Incorporated and changed its name to Safeway Inc. in February 1990. Safeway was founded in 1915 and is based in Pleasanton, California. Advisors' Opinion:
- [By Shauna O'Brien]
Shares of Safeway Inc. (SWY) surged on Tuesday morning after announcing that it has adopted a shareholder rights plan to prevent large accumulations of its stock.
The company has adopted a “poison pill” plan as an anti-takeover precaution after becoming aware of a large accumulation of its common stock.
Safeway did not indentify the investor that is accumulating the stock, but noted that this plan will help maintain “fair and equal treatment” to all shareholders.
The plan will dilute the value of the stock by creating more shares, making it difficult for a single investor to acquire large amounts of stock. Shareholders of the company’s common stock as of September 30 will receive one preferred stock purchase right for every share of common stock that they own.
Safeway shares were up $2.38, or 8.49%, during Tuesday morning trading. The stock is up 68% YTD.
Top Food Companies To Buy For 2015: Creative Edge Nutrition Inc (FITX)
Creative Edge Nutrition Inc. (CENergy), formerly Laufer Bridge Enterprises Inc, incorporated on January 10, 2008, is engaged in the development, marketing and sales of nutraceuticals and health supplements. The Company�� product categories include lean, energy, essentials, mass, vitamins and apparel. In July 2012, it acquired Innovative Fulfillment Corp. In August 2012, the Company acquired SCD Enterprises, LLC. In September 2012, the Company acquired A-Z-Nutrition.com. In September 2012, the Company acquired Sci-Fit and Nature's Science product brands. In March 2013, it announced its entrance into the Medical Marijuana Sector through Hemp Protein Powder, Naturals Line, Hemp-plex and Chia-plex. In May 2013, Creative Edge Nutrition Inc acquired Canadian Nutrition Super Stores.
Metabolic Xtreme utilizes the technology and advancement in weight loss technology. Cenergy�� Amino Acid Complex is the supplement for athletes, bodybuilders and anyone who's trying to live a healthy lifestyle.
Advisors' Opinion: - [By Peter Graham]
Small cap stocks CD International Enterprises Inc (OTCMKTS: CDII), Creative Edge Nutrition Inc (OTCMKTS: FITX) and Metrospaces Inc (OTCMKTS: MSPC) have all been the subject of recent as well as past paid for stock promotions. Of course, there is nothing wrong with properly disclosed stock promotions or investor awareness campaigns, but they can and do often backfire on unwary investors and traders alike. With that in mind, will investors and traders come out winners with these small caps or should they just be left to the promoters? Here is a quick reality check:
Top Food Companies To Buy For 2015: MicroFinancial Incorporated(MFI)
Microfinancial Incorporated, through its subsidiaries, operates as a specialized commercial finance company that provides microticket equipment leasing and rental, and other financing services in the United States. The company provides financing alternatives, and leases and rents commercial equipment to start-up and established businesses for use in their daily operations. It leases water filtration systems, food service equipment, security equipment, point-of-sale cash registers, salon equipment, health care and fitness equipment, and automotive equipment. The company primarily sources its originations through a network of independent equipment vendors, sales organizations, and other dealer-based origination networks. Microfinancial Incorporated was founded in 1987 and is headquartered in Woburn, Massachusetts.
Advisors' Opinion: - [By Gerrit De Vynck]
Maple Leaf Foods Inc. (MFI), the Canadian producer of foods from hamburgers to frozen pasta, has drawn bids for its bread unit from Grupo Bimbo SAB, Flowers Foods Inc. (FLO) and several private-equity firms, three people with knowledge of the matter said.
- [By Eric Lam]
Alacer Gold Corp. and Iamgold Corp. rallied at least 5.9 percent as the metal traded at its highest in 11 weeks. Maple Leaf Foods Inc. (MFI) jumped 7.8 percent as it agreed to sell a unit for C$645 million ($614 million). Penn West Petroleum (PWT) Ltd. added 1.7 percent after cutting 25 percent of its workforce to reduce costs.
Top Food Companies To Buy For 2015: Ralcorp Holdings Inc.(RAH)
Ralcorp Holdings, Inc. engages in manufacturing, distributing, and marketing private-brand food products, ready-to-eat cereal products, and other regional and value-brand food products. Its products include ready-to-eat and hot cereals; nutritional and cereal bars; snack mixes, corn-based chips, and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products, including pancakes, waffles, and French toast; frozen biscuits and other frozen pre-baked products, such as breads and rolls; frozen and refrigerated doughs; and dry pasta. The company offers its products under various brands, including Post, Honey Bunches of Oats, Pebbles, Post Selects, Great Grains, Spoon Size, Grape-Nuts, Honeycomb, 3 Minute Brand, Ralston, Parco, Lofthouse, Krusteaz, Panne Provincio, Major Peters?, Medallion, Ry Krisp, Champagne, Monet, Rippin? Good, Hoody?s, Linette, JERO, Flavor House, Nutcracker, Pennsylvania Dutch, Heartland, Golden Grain, Anthony?s, Pasta Lensi, Ronco, and Mueller?s. It also develops, manufactures, and markets emulations of various types of branded food products to retailers, mass merchandisers, and drug stores to sell under their own store brands or under value-brands. Ralcorp Holdings, Inc. sells its products to retail chains, mass merchandisers, grocery wholesalers, warehouse club stores, drugstores, restaurant chains, and foodservice distributors in the United States, as well as in Canada, Europe, and southeast Asia. It offers its products through a broker network, internal sales staff, independent sales agency, a network of third party warehouses, and independent truck lines. The company was founded in 1995 and is based in St. Louis, Missouri.
Advisors' Opinion: - [By Will Ashworth]
Post’s debt has risen substantially since its separation from Ralcorp (RAH) in February 2012. Including its $370 million acquisition of the Dakota Growers Pasta Company announced Sept. 16, Post has spent $717 million moving into other areas of the food industry beyond cereal.
- [By Louis Navellier]
A $15.5 billion business that employs 34,800 worldwide, ConAgra is the fourth largest player in the Processed & Packaged Goods industry. In early 2013, ConAgra completed its buyout of Ralcorp Holdings (RAH) making the combined company one of the largest packaged food players on the continent.
Top Food Companies To Buy For 2015: 1-800 FLOWERS.COM Inc.(FLWS)
1-800-Flowers.com, Inc. together with its subsidiaries, operates as a florist and gift retailer in the United States. The company offers a range of products, including fresh-cut flowers, floral arrangements and plants, gifts, popcorn, gourmet foods and gift baskets, cookies, chocolates, candy, and wine through its telephonic and online sales channels, company-owned and operated retail floral stores, and franchised stores. It provides gourmet gifts, such as popcorn and specialty treats through thepopcornfactory.com; cookies and baked gifts through cheryls.com; chocolates and confections through fanniemay.com and harrylondon.com; gift baskets and towers through 1800baskets.com; Celebrations brand party ideas and planning tips through celebrations.com; and customizable invitations, announcements, and greeting cards through finestationery.com. As of July 3, 2011, the company operated 2 floral retail stores, 1 fulfillment center, and approximately 100 franchised stores located within the United States. It has strategic online relationships with Facebook, Google, AOL, Yahoo!, and Microsoft. The company was founded in 1976 and is headquartered in Carle Place, New York.
Advisors' Opinion: - [By Laura Brodbeck]
Earnings Expected From: 1-800 Flowers.com, Inc (NASDAQ: FLWS)
Economic Releases Expected:�Eurozone unemployment rate, Italian CPI, Greek retail sales, French consumer spending, Canadian GDP.
Top Food Companies To Buy For 2015: CHS Inc (CHSCP)
CHS Inc. (CHS) is an integrated agricultural company. As a cooperative, the Company is owned by farmers and ranchers and their member cooperatives (members) across the United States. The Company buys commodities from and provide products and services to patrons (including its members and other non-member customers), both domestic and international. It provides a variety of products and services, from initial agricultural inputs, such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs, which include grains and oilseeds, grain and oilseed processing and food products. A portion of its operations are conducted through equity investments and joint ventures. The Company has three segments: Energy, Ag Business, and Corporate and Other. In February 2012, the Company acquired Solbar. In May 2012, the Company acquired a 51% interest in CZL Ltd. In August 2012, it acquired Atman. Effective July 28, 2013, CHS Inc, a unit of Hamilton Farm Bureau Co-Operative Inc, acquired a 50% interest in AgFarm Pty Ltd, from Ruralco Holdings Ltd.
During the fiscal year ended August 31, 2011 (fiscal 2011), the Company dissolved its United Harvest joint venture, which operated two grain export facilities in Washington that were leased from the joint venture participants. During fiscal 2011, the Company sold its 45% ownership interest in Multigrain to one of its joint venture partners, Mitsui & Co., Ltd. During fiscal 2011, the Company, through its wholly owned subsidiary, CHS Europe, S.A. acquired Agri Point Ltd.
The Company�� Energy segment derives its revenues through refining, wholesaling and retailing of petroleum products. Its Ag Business segment derives its revenues through the origination and marketing of grain, including service activities conducted at export terminals, through the wholesale sales of crop nutrients, from the sales of soybean meal and soybean refined oil and through the retail sales of petroleum and agronomy products, processed sunflow! ers, feed and farm supplies, and records equity income from investments in its grain export joint ventures and other investments. It includes other business operations in Corporate and Other. These businesses primarily include its financing, insurance, hedging and other service activities related to crop production. In addition, the Company�� wheat milling and packaged food operations are included in Corporate and Other.
Energy
The Company is the nation�� cooperative energy company based on revenues and identifiable assets. The Company�� operations include petroleum refining and pipelines; the supply, marketing (including ethanol and biodiesel) and distribution of refined fuels (gasoline, diesel fuel and other energy products); the blending, sale and distribution of lubricants; and the wholesale supply of propane. The Energy segment processes crude oil into refined petroleum products at refineries in Laurel, Montana (wholly owned) and McPherson, Kansas (an entity in which the Company has an approximate 74.5% ownership interest) and sells those products under the Cenex brand to member cooperatives and others through a network of approximately 1,400 independent retail sites, of which 57% are convenience stores marketing Cenex branded fuels.
The Company�� Laurel, Montana refinery processes medium and high sulfur crude oil into refined petroleum products that primarily include gasoline, diesel fuel, petroleum coke and asphalt. Its Laurel refinery sources approximately 85% of its crude oil supply from Canada, with the balance obtained from domestic sources, and the Company has access to Canadian and northwest Montana crude through its wholly owned Front Range Pipeline, LLC and other common carrier pipelines. Its Laurel refinery also has access to Wyoming crude via common carrier pipelines from the south. The Laurel facility processes approximately 55,000 barrels of crude oil per day to produce refined products that consist of approximately 43% gasoline, 37% die! sel fuel ! and other distillates, 5% petroleum coke, and 15% asphalt and other products. Refined fuels produced at Laurel are available via the Yellowstone Pipeline to western Montana terminals and to Spokane and Moses Lake, Washington, south via common carrier pipelines to Wyoming terminals and Denver, Colorado, and east via its wholly owned Cenex Pipeline, LLC to Glendive, Montana, and Minot and Fargo, North Dakota.
The McPherson, Kansas refinery is owned and operated by National Cooperative Refinery Association (NCRA), of which the Company owns approximately 74.5%. The McPherson refinery processes approximately 85% low and medium sulfur crude oil and 15% heavy sulfur crude oil into gasoline, diesel fuel and other distillates, propane and other products. NCRA sources its crude oil through its own pipelines as well as common carrier pipelines. The low and medium sulfur crude oil is sourced from Kansas, Oklahoma and Texas, and the heavy sulfur crude oil is sourced from Canada. The McPherson refinery processes approximately 85,000 barrels of crude oil per day to produce refined products that consist of approximately 49% gasoline, 45% diesel fuel and other distillates, and 6% propane and other products. Approximately 32% of the refined fuels are loaded into trucks at the McPherson refinery or shipped via NCRA�� products pipeline to its terminal in Council Bluffs, Iowa. The remaining refined fuel products are shipped to other markets via common carrier pipelines.
The Company�� renewable fuels marketing business markets and distributes ethanol and biodiesel products throughout the United States and overseas by contracting with ethanol and biodiesel production plants to market and distribute their finished products. It owns and operates a propane terminal, four asphalt terminals, seven refined product terminals and three lubricants blending and packaging facilities. The Company also owns and leases a fleet of liquid and pressure trailers and tractors, which are used to transport refined fu! els, prop! ane, anhydrous ammonia and other products.
The Company�� Energy segment produces and sells (primarily wholesale) gasoline, diesel fuel, propane, asphalt, lubricants and other related products and provides transportation services. It obtains the petroleum products that it sells from its Laurel and McPherson refineries, and from third parties. In fiscal 2011, the Company obtained approximately 55% of the refined products it sold from its Laurel and McPherson refineries, and approximately 45% from third parties.
Ag Business
The Company�� Ag Business segment includes crop nutrients, country operations, grain marketing and oilseed processing. The revenues in its Ag Business segment primarily include grain sales. Its wholesale crop nutrients business sells approximately 5.6 million tons of fertilizer annually. Primary suppliers for the Company�� wholesale crop nutrients business include CF Industries, Potash Corporation of Saskatchewan, Mosaic Company, Koch Industries, Petrochemical Industries Company (PIC) in Kuwait and Belrusian Potash Company. The Company�� wholesale crop nutrients business sells nitrogen, phosphorus, potassium and sulfate based products. During fiscal 2011, the primary crop nutrients products the Company purchased were urea, potash, UAN, phosphates and ammonia. The wholesale crop nutrients business sells product to approximately 2,000 local retailers from New York to the west coast and from the Canadian border to Texas. Its largest customer is its own country operations business, which is also included in its Ag Business segment.
The Company�� country operations business purchases a variety of grains from its producer members and other third parties, and provides cooperative members and customers with access to a range of products, programs and services for production agriculture. Country operations operates 401 locations through 67 business units, the majority of which have local producer boards dispersed throughout Colorado, ! Idaho, Il! linois, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, South Dakota, Texas and Washington. Most of these locations purchase grain from farmers and sell agronomy, energy, feed and seed products to those same producers and others, although not all locations provide every product and service.
The Company is one of the country elevator operators in North America based on revenues. Through a majority of the Company�� locations, its country operations business units purchase grain from member and non-member producers and other elevators and grain dealers. Most of the grain purchased is sold through its grain marketing operations, used for livestock feed production or sold to other processing companies. For the year ended August 31, 2011, country operations purchased approximately 582 million bushels of grain, primarily wheat, corn and soybeans. Of these bushels, 558 million were purchased from members and 417 million were sold through its grain marketing operations. Its country operations business units manufacture and sell other products, both directly and through ownership interests in other entities. These include seed, crop nutrients, crop protection products, energy products, animal feed, animal health products and processed sunflower products.
The Company is the cooperative marketer of grain and oilseed based on grain storage capacity and grain sales, handling over 2.1 billion bushels annually. During fiscal 2011, it purchased approximately 60% of its total grain volumes from individual and cooperative association members and its country operations business, with the balance purchased from third parties. The Company arranges for the transportation of the grains either directly to customers or to its owned or leased grain terminals and elevators awaiting delivery to domestic and foreign purchasers. It primarily conducts its grain marketing operations directly, but do conduct some of its business through joint ventures.
The Company��! grain ma! rketing operations purchases grain directly and indirectly from agricultural producers primarily in the midwestern and western United States. The purchased grain is contracted for sale for future delivery at a specified location, and it is responsible for handling the grain and arranging for its transportation to that location. The Company owns and operates export terminals, river terminals and elevators involved in the handling and transport of grain. Its river terminals are used to load grain onto barges for shipment to both domestic and export customers via the Mississippi River system. These river terminals are located at Savage and Winona, Minnesota and Davenport, Iowa, as well as terminals in which it has put-through agreements located at St. Louis, Missouri and Beardstown and Havana, Illinois.
The Company�� export terminal at Superior, Wisconsin provides access to the Great Lakes and St. Lawrence Seaway, and its export terminal at Myrtle Grove, Louisiana serves the Gulf of Mexico market. In the Pacific Northwest, it conducts its grain marketing operations through TEMCO, LLC (a 50% joint venture with Cargill) which operates an export terminal in Tacoma, Washington, and primarily exports corn and soybeans. The Company owns two 110-car shuttle-receiving elevator facilities in Friona, Texas and Collins, Mississippi that serve large-scale feeder cattle, dairy and poultry producers in those regions.
For sourcing and marketing grains and oilseeds through the Black Sea and Mediterranean Basin regions to customers worldwide it has offices in Geneva, Switzerland; Barcelona, Spain; Kiev, Ukraine; and Vostok, Russia. In addition, it opened grain merchandising offices in fiscal 2011 in Budapest, Hungary; Novi Sad, Serbia; Bucharest, Romania; Sofia, Bulgaria; and a marketing office in Amman, Jordan. The Company has a deep water port in Constanta, Romania, a barge loading facility on the Danube River in Giurgiu, Romania, and an inland grain terminal at Oroshaza, Hungary. In addition! , it has ! an investment in a port facility in Odessa, Ukraine. In the Pacific Rim area, it has offices in Hong Kong and Shanghai, China that serve customers receiving grains and oilseeds from its origination points in North and South America. In South America, the Company has a grain merchandising offices to source grains in Sao Paulo, Brazil and Buenos Aires, Argentina. It sells and markets crop nutrients from its Geneva, Switzerland; Sao Paulo, Brazil; and Buenos Aires, Argentina offices.
The Company�� grain marketing operations purchased approximately 2.1 billion bushels of grain during fiscal 2011, which primarily included corn, soybeans, wheat and distillers dried grains with solubles (DDGS). Of the total grains purchased by its grain marketing operations, 866 million bushels were from its individual and cooperative association members, 417 million bushels were from its country operations business and the remainder was from third parties. The Company�� oilseed processing operations convert soybeans into soybean meal, soyflour, crude soybean oil, refined soybean oil and associated by-products. These operations are conducted at a facility in Mankato, Minnesota that can crush approximately 40 million bushels of soybeans on an annual basis, producing approximately 960 thousand short tons of soybean meal and 460 million pounds of crude soybean oil. The same facility is able to process approximately 1.1 billion pounds of refined soybean oil annually. Another crushing facility in Fairmont, Minnesota has a crushing capacity of over 50 million bushels of soybeans on an annual basis, producing approximately 1.2 million short tons of soybean meal and 575 million pounds of crude soybean oil.
The Company�� oilseed processing operations produce three primary products: refined oils, soybean meal and soyflour. Refined oils are used in processed foods, such as margarine, shortening, salad dressings and baked goods, as well as methyl ester/biodiesel production, and for certain industrial uses, ! such as p! lastics, inks and paints. Soybean meal has high protein content and is used for feeding livestock. Soyflour is used in the baking industry, as a milk replacement in animal feed and in industrial applications. It produces approximately 60 thousand tons of soyflour annually, and approximately 20% is further processed at its manufacturing facility in Hutchinson, Kansas. This facility manufactures unflavored and flavored textured soy proteins used in human and pet food products, and accounted for approximately 2% of its oilseed processing annual sales in fiscal 2011.
The Company�� soy processing facilities are located in areas with a strong production base of soybeans and end-user market for the meal and soyflour. It purchases virtually all of its soybeans from members. The Company�� oilseed crushing operations produce approximately 95% of the crude soybean oil that it refines, and purchases the balance from outside suppliers. Its customers for refined oil are principally large food product companies located throughout the United States. However, over 50% of its customers are located in the midwest. Its largest customer for refined oil products is Ventura Foods, LLC (Ventura Foods), in which it holds a 50% ownership interest. The Company�� sales to Ventura Foods accounted for 27% of its soybean oil sold during fiscal 2011. The Company also sells soymeal to approximately 325 customers, primarily feed lots and feed mills in southern Minnesota. In fiscal 2011, Interstate Commodities accounted for 12% of its soymeal sold. It sells soyflour to customers in the baking industry both domestically and for export.
Corporate and Other
The Company has provided open account financing to approximately 100 of its members that are cooperatives (cooperative association members). These arrangements involve the discretionary extension of credit in the form of a clearing account for settlement of grain purchases and as a cash management tool. CHS Capital, LLC makes seasonal and term! loans to! member cooperatives and individual producers. The Company�� wholly owned subsidiary, Country Hedging, Inc., is a registered Futures Commission Merchant and a clearing member of both the Minneapolis Grain Exchange and the Kansas City Board of Trade. Country Hedging provides full-service commodity risk management brokerage and consulting services to its customers, primarily in the areas of agriculture and energy.
The Company�� wholly owned subsidiary, Ag States Agency, LLC, is a full-service independent insurance agency. It sells insurance, including all lines of insurance including property and casualty, group benefits and surety bonds. Its approximately 2,000 customers are primarily agribusinesses, including cooperatives and independent elevators, energy, agronomy, feed and seed plants, implement dealers and food processors. Impact Risk Solutions, LLC, a wholly owned subsidiary of Ag States Agency, LLC, conducts the insurance brokerage business of Ag States Group.
The Company�� primary focus in the foods area is Ventura Foods, LLC (Ventura Foods) which produces and distributes vegetable oil-based products, such as margarine, salad dressing and other food products. Ventura Foods is 50% owned by the Company. Ventura Foods manufactures, packages, distributes and markets bulk margarine, salad dressings, mayonnaise, salad oils, syrups, soup bases and sauces, many of which utilize soybean oil as a primary ingredient. Ventura Foods has 11 manufacturing and distribution locations across the United States. Ventura Foods sources its raw materials, which consist primarily of soybean oil, canola oil, cottonseed oil, peanut oil and other ingredients and supplies, from various national suppliers, including its oilseed processing operations. Agriliance LLC (Agriliance) is owned and governed by CHS (50%) and Land O��akes, Inc. (50%).
The Company competes with ConocoPhillips, Valero, BP Amoco, Flint Hills Resources, CVR Energy, Western Petroleum Company, Marathon, ExxonMo! bil, Citg! o, Flint Hills Resources, U.S. Oil, Delek US Holdings, HollyFrontier Corporation, Sinclair Oil Corporation, Tesoro, Chevron, Koch Industries, Agrium, Archer Daniels Midland (ADM), Cargill, Incorporated (Cargill), Simplot, Helena, Wilbur Ellis, Land O��akes Purina Feed, Hubbard Milling, Columbia Grain, Gavilon, Bunge, Louis Dreyfus, Ag Processing Inc., Unilever, ConAgra, ACH Food Companies, Smuckers, Kraft and CF Sauer, Ken��, Marzetti and Nestle.
Advisors' Opinion: - [By Paul Ausick]
ConAgra said on Wednesday that it will close two plants in New York by early 2015, cutting more than 400 employees. The company also expects to close its $4 billion flour mill merger in the second calendar quarter of 2014. Privately held Cargill and CHS Inc. (NASDAQ: CHSCP) will hold 44% and 12%, respectively, of Ardent Mills, while ConAgra will hold the other 44%. Combined sales of what will be the country’s largest milling operation total $4.3 billion.
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Junho Kim/The Wall Street Journal 
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