spin off

WAL-MART STORES INC., $66.56, New York symbol WMT, fell 8% this week after reporting lower-than-expected earnings. But that’s partly because it’s investing heavily in its websites and hiring more workers to speed up checkout lines. It has also raised wages. In the second quarter of its 2016 fiscal year, which ended July 31, 2015, Wal-Mart’s earnings fell 11.4%, to $3.5 billion from $3.9 billion a year earlier. Earnings per share declined 10.7%, to $1.08 from $1.21, on fewer shares outstanding, missing the consensus forecast of $1.12. Overall sales gained 0.1%, to $120.2 billion from $120.1 billion, beating the consensus estimate of $119.7 billion. Excluding the high U.S. dollar’s impact on the company’s overseas operations, revenue gained 3.6%. Online sales jumped 16%....

SYMANTEC CORP., $21.60, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In 2014, the company said it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software and services. The other, called Veritas Technologies, would consist of Symantec’s information-management business, which makes products for data backup and recovery. However, the company has now decided to sell Veritas to a group of private investors for $8.0 billion. It expects to close the deal on January 1, 2016....

This is the third in our regular series of Spinoff Stock Investigator reports. It’s been a busy year for spinoff news from our stock recommendations: Hewlett-Packard expects to complete spinoffs by the end of 2015; Symantec and United Technologies have decided to accept big purchase offers for some of their businesses instead of spinning them off; and FirstService, eBay, Gannett, BHP Billiton and Baxter International have all completed their spinoffs. We hope you will continue to enjoy and profit from our Spinoff Stock Investigator....

BHP Billiton (ADR), $39.13, New York symbol BHP (ADRs outstanding: 1.6 billion; Market cap: $64.3 billion; www.bhpbilliton.com), completed its plan to spin off some of its operations as a separate firm, called South32, in May 2015. BHP is a recommendation of our Wall Street Stock Forecaster newsletter. The South32 ADRs began trading on the Australian Securities Exchange on May 18, 2015, and on the U.S. over-the-counter market (symbol SOUHY) on the same date. BHP ADRs dropped about 7% on May 18, 2015, reflecting the value of the spun off South32 shares....

GOOGLE INC., Nasdaq symbols GOOG (class C non-voting), $672.93, and GOOGL (class A voting), $699.62, jumped 16% after reporting better-than-expected earnings this week. In the three months ended June 30, 2015, the company’s earnings gained 17.7%, to $4.8 billion from $4.1 billion a year earlier. Per-share profits rose 16.9%, to $6.99 from $5.98, on more shares outstanding. That was well ahead of the consensus estimate of $6.71. Revenue increased 11.1%, to $17.7 billion from $16.0 billion, falling just short of the consensus forecast of $17.8 billion. Excluding the negative impact of currency-exchange rates, revenue gained 18%....

CONAGRA FOODS INC., $44.56, New York symbol CAG, plans to sell its private-label food business, which makes packaged foods for grocery, warehouse club and drug stores. The company entered this business in January 2013 when it paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S. However, the purchase hasn’t worked out as well as ConAgra hoped, as strong competition and higher ingredient costs hurt Ralcorp’s sales and earnings. As a result, ConAgra has had to write down this investment by $2.1 billion. In its fiscal 2015 fourth quarter, which ended May 31, 2015, ConAgra’s overall sales rose 3.7%, to $4.10 billion from $3.96 billion a year earlier. That missed the consensus forecast of $4.14 billion....

CONAGRA FOODS INC. $44 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 427.1 million; Market cap: $18.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.conagrafoods.com) bought Ralcorp Holdings, the largest private-label food maker in the U.S., for $4.75 billion in January 2013. The purchase has not worked out as well as ConAgra had hoped, as strong competition hurt Ralcorp’s sales and earnings. As a result, the company has had to write down this investment by $2.1 billion. In response, ConAgra has launched a restructuring plan aimed at improving Ralcorp’s profitability. This strategy includes better packaging, speeding up deliveries and launching new products. It has also cut its private-label prices, which should help improve Ralcorp’s market share....

INTEL CORP. $32 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.7 billion; Market cap: $150.4 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.intel.com) has purchased Recon Instruments, a privately held Vancouver firm that makes heads-up displays for sports goggles and other specialized eyewear. This is a small acquisition for Intel: the $175-million purchase price is just 9% of the $2.0 billion, or $0.41 a share, the chipmaker earned in the three months ended March 28, 2015. However, Recon’s technology will help Intel profit from rising sales of wearable devices, such as wristwatches that monitor heart rates and other biological data. Intel is a buy....

As it improves the performance of a big 2013 acquisition, ConAgra solidifies its position as one of our top stocks to buy in the U.S.

CONAGRA FOODS INC., $43.37, New York symbol CAG, jumped 11% on Friday on news that activist investment firm Jana Partners now owns 7.2% of the company. Jana will probably push ConAgra to sell or spin off its private-label food business. In January 2013, ConAgra paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S. However, strong competition has hurt its sales and earnings. As a result, ConAgra has had to writedown this investment by $2.1 billion. To put these figures in context, ConAgra’s market cap is $17.0 billion....