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Thursday, October 11, 2012

Hillshire VS. Tyson

As we continue with our Consumer Foodstuffs weeks, we are now looking at Hillshire Brands (HSH) and Tyson Foods (TSN). Hillshire is a meat food solutions company established in 1934 that is now headed by Sean Connolly. We studied the stock market of this company, since the split from DE US (a coffee retailer) in July 2012, and have noticed that, although the shares significantly declined since the split, they are on the beginnings of a road to recovery. Unfortunately, as we observed more recent trading, their market has been consistently unstable, never pushing above $27.5. On September 12th, BMO Capital Markets reiterated the market performance of Hillshire Brands which resulted in a gain of almost 1.5 points. Just yesterday, the market was back down to the level a month ago. As we do with our other companies, we bought ten simulated shares of Hillshire, each priced at $26.70. Note that we bought these nearly a month ago, around September 14th. Although the shares are now at $26.50, turning a small loss, we could have gained a profit having sold the stocks on September 21st. Granted, even with this very real possibility, we still advise against investing in Hillshire. This is one of the most unstable companies and we see no positive possibilities for the company in the near future.
Our other company of this post is Tyson Foods. Tyson is also a meat food solutions company but that was established in 1931. The current CEO is Donald Smith. Since the mid-70s, the company has slowly increased, but experienced severe spikes both up and down (especially down) since the 1990s. On September 10th, a competitor of both companies, Hormel was reduced to a 'neutral' status and activity increased in other similar foodstuffs companies, including Tyson. A week later, Brasil Foods decided not to buy Tyson, which consequently reduced the share price for a day. As  with Hillshire, we bought ten shares at $16.10; the market closed today at $16.11. Yes, this was indeed a profit (very minute) but it shows the lack of a good future in investing with Tyson. Unfortunately, we do not have any positive advice for either of these companies. This is not the best time to invest in such products, but we sincerely hope the market for such goods will soon pick up and allow these companies to attain levels unreached since last decade.

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