Fifteen Most Overvalued Stocks: ConAgra

By Douglas A. McIntyre Published Nov 20, 9:27AM EST

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In looking for the most overvalued stocks, we considered metrics like price-to-sales, rapid stock price appreciation not supported by comparable financial growth, pricing and revenue pressure from competition, and future predictions of success like forward P/E. All of the stocks that we examined are large caps, and we have made an attempt to look across as many industries as possible.

Conagra. In CAG’s most recent quarter, the firm reported a revenue increase of about 1%, below expectations.. The stock has moved from about $21 in August to the current level of almost $26. The company is in the midst of restructuring that involves shedding it commodity businesses and focusing on package-goods business.

Conagra cut its quarterly dividend earlier this year, and a number of shareholders have expressed concerns that the company’s management is overpaid. The company recently added $500 million to it share buyback pool, which is often a sign that the board is trying to support an overvalued share price.

As the Wall Street Journal pointed out recently, Conagra’s brands are mostly the No.2 or No.3 brands in their categories, making it tougher to sell them to retailers. Morningstar summed it up nicely by describing Conagra as an "unappealing mess".

It remains a mystery why the stock trades at $25.22, fairly near its 52-week high.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.