10 Best Chocolate Stocks to Buy Now

6. Conagra Brands, Inc. (NYSE:CAG)

Number of Hedge Fund Holders: 31

Conagra Brands, Inc. (NYSE:CAG), headquartered in Chicago, is one of North America’s leading branded food companies. Iconic brands like Birds Eye, Duncan Hines, Healthy Choice, Marie Callender’s, Reddi-wip, and Slim Jim offer choices for every occasion. The Swiss Miss brand delivers a rich, decadent chocolate experience made with premium European cocoa and fresh milk, without artificial sweeteners.

In Q3 2024, Conagra Brands, Inc. (NYSE:CAG) experienced a 1.7% decline in net sales, with organic net sales declining by 2.0% due to reduced volumes. The Grocery & Snacks segment, which includes the popular Swiss Miss brand, grew by 3.4%, driven by a 4.2% price/mix increase in snacking categories. Other segments also experienced growth, with the Refrigerated & Frozen segment up by 8.1% and the international sales segment up by 4.6%. Despite this, net income fell 9.7% to $309 million, primarily due to higher SG&A expenses. However, an EPS of $0.69 beat expectations of $0.65.

Despite strong liquidity, cash flow came under pressure as it decreased to $78.5 million due to higher SG&A expenses and cost of goods sold inflation. Adjusted EBITDA fell by 5.3% to $634 million, indicating challenges in maintaining cash generation despite the company’s efforts to optimize profitability.

In January 2024, Conagra Brands, Inc. (NYSE:CAG) partnered with Dolly Parton to launch a line of retail food products, including frozen, refrigerated, grocery, and snack items inspired by her comfort cuisine. As a result, the new range features cake and muffin mixes, as well as buttermilk pancake mixes.

Conagra’s share price has risen by 6.92% and 14% on a month and YTD basis, respectively. This share price increase is attributed to strategic pricing actions and improvements in the Grocery & Snacks and International segments. However, challenges remain, including volume declines in the Refrigerated & Frozen segment, deflation-related volatility, and rising SG&A expenses, which may impact future profitability. CAG is among the best chocolate stocks on our list.

Nevertheless, as of Q2 2024, 31 hedge funds, holding a combined investment of $366 million, are bullish on the stock, as per Insider Monkey’s database.