Sanderson Farms Inc. (SAFM) shares surged 10.16% in after-hours on Monday, June 21, 2021, and close the day at $183.50 per share. Earlier in the morning session, SAFM’s stock gained 6.96% to close Monday’s normal trading session at $166.58 per share. SAFM shares have risen 35.97% over the last 12 months, and they have moved up 0.28% in the past week. Over the past three months, the stock has gained 3.99%, while over the past six months, it has declined 19.42%.
Let’s see what’s going on with SAFM recently?
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Is Sanderson looking to sell its business?
Sanderson Farms Inc is exploring a sale according to Dow Jones reporting which quoted the people familiar with the matter.
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The company is seeking advice from Centerview Partners about a sale, and potential buyers include Continental Grain Co., according to Dow Jones.
The company’s Chief Financial Officer Mike Cockrellrefused to comment on market speculation.
The company reported better-than-expected profit and sales as a result, despite higher costs for animal feed, due to the soaring prices of chicken breasts and jumbo wings.
Recent financial results announcement
On May 27, 2021, Sanderson Farms, Inc released its financial results for its second fiscal quarter, and six months ended April 30, 2021.
Q2 2021 financial highlights
- Sanderson Farms reported a net sale of $1,133.9 million for Q2 2021 compared with $844.7 million for the same period a year ago.
- Selling, general and administrative expenses were $64.23 million for Q2 2021 compared to $56.22 million in Q2 2020.
- Net income was 96.9 million, or $4.34 per share in Q2 2021 compared with net income of $6.1 million, or $0.28 per share, for the second quarter of fiscal 2020.
- The dividend per share was $0.44 in Q2 2021 compared with $0.32 per share in Q2 2020.
Financial highlights for the first six months of fiscal 2021
- Sanderson Farms net sales were $2,043.2 million for the first six months of fiscal 2021compared with $1,667.8 million for the same period of fiscal 2020.
- It reported a net income of $106.4 million, or $4.76 per share for the first half of the fiscal year, compared with a net loss of $32.5 million, or $1.48 per share, for the first six months of fiscal 2020.
- Selling, general and administrative expenses were $120.84 million for the first half of the fiscal year 2021 compared to $105.7 for the first six months of fiscal 2020.
- The dividend per share was $0.88 for the first six months of fiscal 2021 compared with $0.64 per share for the first six months of fiscal 2020.
Conclusion
The speculations that Sanderson Farms looking to sell its business could be the reason behind its exceptional performance on Monday or the increasing demand for the poultry products after pandemic restrictions are easing off could be the reason behind its surge on Monday. We are pretty confident that the surge will continue in the coming days for SAFM stock.