ConAgra: Multi-Year Lows Spur Insider Buying

ConAgra (CAG) has lost about 33% of its value this past year in comparison to the Dow Jones Industrial Average trouncing of 20%. I had always been taught that defensive issues such as food companies actually were supposed to thrive in down markets, yet CAG shares took a beating that was 65% worst than the overall market. In other words, its relative strength was meager to say the least. CAG's price demise is even more absurd when you factor in its low Beta of .76 (how the shares trade in relation to the overall market)—If you do the math, CAG should have been down only 15% rather than 33% ( .76 beta x .20 DJIA loss=.15). To say the shares have been beaten down is an understatement, as they haven't been this low in 12 years.

The future: Analysts are expecting 2009 earnings of $0.98 on revenues of $12.4 billion, equating to a forward PE of 12. CAG's one year mean price target is $24. Both Davenport and Bear Sterns have bullish research opinions while Stifel Nicolaus, Prudential and Bank of America each have neutral ratings.