Analyst: Imation CEO's future in flux
Imation's shareholders sided with the activist shareholder group at Wednesday's annual meeting and elected a slate of three directors offered by the Clinton Group.
In another strike against the company, shareholders sided against Imation's executive compensation plan in a nonbinding advisory vote.
Lake Street Capital Market analyst Eric Martinuzzi has been following the proxy battle, and he speculated about the fate of Imation's CEO in a research note Thursday: "While the shareholder meeting results do not require a change at the top, we struggle to see how President and CEO Mark Lucas can remain in charge given the message conveyed by the vote."
Martinuzzi believes the new board will move quickly to address yet another strategic reorganization of the company, the fate of the current management and to make new proposals for both executive and board compensation.
Analyst surprised at Hormel stock bump
Jennie-O, a subsidiary of Hormel Foods Corp., is the second-largest turkey processor in the country. It has been particularly hard hit by the bird flu, which has affected 55 farms that supply Jennie-O with turkeys. But the bird flu didn't begin to affect Jennie-O until the end of Hormel's second quarter, which was April 26.
Second-quarter sales for the Jennie-O division increased 15 percent and profits increased 41 percent, helping parent Hormel to a profitable quarter that exceeded analysts' expectations and sent the stock up 4 percent on Wednesday.
"I'm a little shocked the stock moved up that much," Brian Yarbrough, an analyst with Edward Jones, told the Star Tribune on Wednesday.
Hormel probably is not out of the woods yet with the bird flu. The company has already said the decrease in turkey stores will cause full-year adjusted earnings to fall to the low end of the $2.50 to $2.60 per share range.
Too soon to embrace Arctic Cat plan
Plymouth-based Arctic Cat Inc. held an analysts day last week, the company's first with new CEO Chris Metz and Chris Eperjesy, its new chief financial officer. The duo told analysts, among other information, of Arctic Cat's plans to adjust the company's inventory and improve profitability.
Wedbush analyst James Hardiman, while impressed with the resumes of the two executives, has a "neutral" rating on the shares.
"To get truly excited about the [Arctic Cat] story," he wrote, "we would need to believe that either the company will return to peak earnings levels fairly quickly, or that there is significant long-term upside to historical peak earnings."