Performance Food Group is the IBD Stock Of The Day for Thursday. PFGC stock eyes a buy zone while it trades just shy of record highs.
The Richmond, Va.-based food supplier and logistics company offers everything from pizza, steaks and seafood to teas, coffee and vending machine concessions. PFG has more than 150 distribution locations in North America and delivers more than 250,000 national and branded food products to its 300,000-plus customer locations, according to its website.
The company services independent and chain restaurants, businesses, schools, big box retailers, movie theaters and health care facilities. PFG claims to have one of the largest truck fleets in the nation, logging more than 156 million miles each year.
PFG's operations are broken into three segments. The smallest segment, Vistar, delivers vending and snack products to various retail and convenience locations. It brought in $192 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) on revenue of $3.6 billion in the fiscal year ended in July. Its Convenience unit supplies fresh food to grocers, convenience stores and mass merchants. It earned $151.4 million on $20.6 billion in revenue last year. Foodservice provides meals, ingredients and kitchen equipment to thousands of restaurants. It squeezed $741.8 million in profit from revenue of $26.6 billion.
The company was more than 100 years old when it officially became Performance Food Group in 1985. Then, in 2008, it was acquired by Wellspring Capital Management and Blackstone. The new owners folded Vistar and Roma Foods into the company, then spun it out as a publicly traded outfit in 2015. Shares are up more than 220% since the IPO.
Food inflation has recently helped the company serve up banquet-size earnings growth, averaging 114% spikes the past four quarters. Revenue growth has been less appetizing during that period, slowing to 8% growth at year-end, down from a pandemic-fueled 88% surge in December 2021.
For its Q3 results on May 10, analysts forecast Performance Food Group to report a 39% earnings leap to 71 cents per share on 6.3% sales growth to $13.9 billion.
PFGC Stock
Performance Food Group earns IBD's top rating among stocks in the Wholesale-Food Group, according to IBD Stock Checkup. It leads competitors U.S. Foods, Amcon Distributing and Sysco.
PFGC stock is trading near its all-time high of 63.13, chalked up at the beginning of February. Shares are closing in on the 62.53 buy point for a cup-with-handle base according to MarketSmith. That base formed after a failed breakout from an earlier base in February.
PFGC stock is just shy of reclaiming its 10-day moving average but holding above its other technical lines.
PFG's relative strength line is off its highs from December and it has an 88 RS Rating. PFGC stock has a 76 EPS Rating. Performance Food has a strong 86 Composite Rating, which combines a number of technical indicators into one easy-to-read score.
PFGC stock rose 1% Thursday to 60.63.
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