We recently compiled a list of the 10 Best Cookies and Crackers Stocks to Buy. In this article, we are going to take a look at where J&J Snack Foods Corp. (NASDAQ:JJSF) stands against the other cookies and crackers stocks.
The Global Cookie and Cracker Market
The global cookie and cracker market was valued at $100.2 billion in 2023 and is expected to grow to $122.45 billion by 2030, growing at a compound annual growth rate of 3.7% during the forecast period between 2024 and 2030. Region-wise, North America dominates the market with the United States and Canada as its top markets. With significant markets in the United Kingdom, Germany, and France, Europe follows. Simultaneously, Asia Pacific is depicting rapid growth with significant market expansion in countries such as China and India.
What is the Global Snacking Industry Looking Like?
According to Mondelēz International’s annual State of Snacking Report 2023, consumers continue to snack strong as 6 in 10 global consumers surveyed for the last 5 years have been consistently of the opinion that they tend to eat many small meals throughout their days instead of few large ones while young people look forward to the snacks in their day, more as compared to the meals. Younger consumers tend to snack once or more a day. Across all ages, the majority have ritualized snack time as they consume a snack at a special moment or time of the day.
Consistent snack spending is evident from the fact that two-thirds of consumers have not made significant changes to their spending on snacks although they are more conscious of price. Recently, consumers have cut back spending on non-essential items which has negatively impacted sales for Starbucks and McDonald’s. However, the threat doesn’t seem major to the snacking industry as snacking giants still see snacking as a large, attractive, and durable category that continues to grow in importance with consumers.
A piece of important news surfacing in the market just before the year’s end, as reported by CNBC, is that the Oreo maker has made a preliminary takeover approach for Hershey according to those familiar with the matter. The company had previously made a takeover bid for Hershey in 2016 which Hershey’s board unanimously rejected. The acquisition, if it takes place, is going to result in one of the biggest confectionery companies globally. While the combined business could be a huge deal, the question about it competing against the recent Mars’ acquisition of Kellanova which is expected to materialize in the coming year, is circulating all around. This acquisition is a great deal in the global snacking market as well since it ranks among the top 10 global food and beverage mergers and acquisitions since 1995, as revealed by Dealogic.
Our Methodology:
In order to compile a list of the 10 best cookies and crackers stocks to buy, we went through stock screeners, relevant ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best cookies and crackers stocks to buy have been arranged in ascending order of their hedge fund holders, as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A bustling retail supermarket, stocked with a variety of frozen beverages, soft pretzels, and donuts.
J&J Snack Foods Corp. (NASDAQ:JJSF)
Number of Hedge Fund Holders: 15
J&J Snack Foods Corp. (NASDAQ:JJSF) offers branded snack foods to food service and retail supermarket outlets across the United States. The firm’s products include the iconic SUPERPRETZEL and ICEE, fan favorites like LUIGI’S Real Italian Ice, The Funnel Cake Factory Funnel Cakes, and Hola Churros, as well as a variety of other products spanning baked goods, frozen beverages, and frozen novelties categories.
The firm serves as a leader and innovator in the snack food industry. It has evolved from a humble facility and eight employees into a family of 4,200 with locations across the US and products in every supermarket nationwide. The firm continues to bolster its strong brand portfolio. In April, J&J Snack Foods Corp. (NASDAQ:JJSF) made a strategic move with the acquisition of the Thinsters, a brand known well for its thin, crunchy cookies made from simple, real ingredients. This strengthened the firm’s position as a leader in the American snack food market. Regarding the move, Dan Fachner, the firm’s President and CEO, commented:
“This acquisition is a natural fit for us, complementing our already vast offering of cookies and baked goods. Thinsters’ dedication to using high-quality, wholesome ingredients resonates perfectly with our growing customer base. We look forward to leveraging our strengths to expand distribution and introduce Thinsters cookies to a wider audience.”
The important aspect of this move was that J&J Snack Foods Corp. (NASDAQ:JJSF) has priorly completed over 30 transactions that have successfully integrated niche brands into beloved American snacks, some of which include SUPERPRETZEL, ICEE, and DIPPIN’ DOTS. It is indeed through organic growth and strategic acquisitions that the firm is now positioned as a billion-dollar diversified food company that is a major player in the snack food industry.
The growth has translated into strong financial results for the company as it closed a promising fiscal 2024 with net sales increasing 1% to a record $1.57 billion. It posted double-digit growth in adjusted EBITDA led by 80 basis points improvement in gross margins to 30.9%. With a diverse portfolio of beloved brands, the firm looks forward to a bright fiscal 2025 crowded with numerous growth opportunities.
Overall JJSF ranks 9th on our list of the best cookies and crackers stocks to buy. While we acknowledge the potential of JJSF as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than JJSF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.