J.M. Smucker (SJM) has rallied sharply in recent weeks, benefitting from a flight to safety to food stocks with economic concerns growing and decent results from other food companies like ConAgra (CAG) and General Mills (GIS).
The rally has left the stock just a few percentage points away from my $120 target, and with some risks still ahead for forward earnings estimates, I am recommending sale of the shares. We have had a lot of ups and downs with SJM, but it is now a solid outperformer since my September 2017 recommendation despite the struggles of the food industry.
The recent rally provides a good opportunity to take profits. Sell SJM, and I will plan to have a replacement by our next Value Authority Issue in two weeks.
If you are following the Inner Circle model portfolio, sell your 5% SJM position in the value allocation.