NEW YORK, Oct 18 (Reuters) - Food processing company TreeHouse Foods Inc is sitting on a handful of factors that have not been widely recognized by the markets and could push the stock price higher, investment firm Jana Partners’ Scott Ostfeld said on Tuesday.
“Hidden sources of value are on top of a solid core of increasing private label penetration and acceleration of trade-down due to a more challenging macro environment,” Ostfeld, a partner at Jana Partners, said at the 13D Monitor Active-Passive Investor Summit.
The company, which has a market capitalization of roughly $2.7 billion and whose share price has climbed 13% this year, is benefitting from an improved portfolio, better alignment with management, a seller’s note and a pending lawsuit, Ostfeld said. “The improved portfolio should command a higher valuation.”
The company also adopted a plan earlier this year which would incentivize management to help get the stock price, now trading at $47.91, above $60 a share.
At the same time the company benefits by holding a $420 million senior secured seller note used to finance sale of Meal Prep business which pays a 10% interest which is ready to rise to 13%.
The company and several others also sued Keurig Green Mountain for having allegedly monopolized markets for single- serve coffee brewers and pods, something for which no analyst has assigned any value, Ostfeld said. (Reporting by Svea Herbst-Bayliss in New York Editing by Matthew Lewis)
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