May 3, 2010 - TreeHouse Foods, Inc. (THS-NYSE) operates as a food manufacturing company serving the retail grocery and foodservice channels in the United States and Canada. It offers non-dairy powdered creamer; condensed and ready to serve soups, broths, and gravies; infant feeding products; salad dressings and sauces; pickles, peppers, and relishes; sauces and syrups; Mexican sauces; and jams, pie fillings, and aseptic products and liquid non-dairy creamer.

You would have enjoyed owning THS over the last few years. The stock's price went from a low of $19.20 in 2008 to a recent high of $45.99 on March 10. Look at most stocks in that time frame and you'd see a completely different chart, especially in the period between 2008 and early 2009. THS gave shareholders plenty to appreciate.

Earnings and revenues jumped in 2008, going from $1.32 to $1.61 in share net and $1.158 billion to $1.500 billion in revenues. While revenues were flat in 2009 ($1.511 billion), earnings kept on their upward trend, hitting $2.23. This year, 11 analysts see $2.69, then $3.03 next year. Their guesses for revenues are $1.83 billion this year, then $1.97 billion in 2011. May 6 is the next earnings date. For the first quarter, consensus is for 51 cents a share, well ahead of the 41 cents of last year's first period. For the second quarter, expect 63 cents, an improvement over the 50 cents of last year's second.

Surprise! People are still eating....and adding Cremora or Mocha Mix to their coffee.

The company has a goal to reach $3 billion in sales. Sturm Foods will help them, but more acquisitions seem necessary to reach this mark. Expect the company to remain on the prowl for more acquisitions. It has decent cash flow, and debt is only 36% of capital so paying for smaller add-ons won't be a problem.

Even without new companies under its umbrella, sales are improving. Private-label business, particularly in the creamers and soups, shows strong demand. Consumers are still more likely to stay with lower-priced private label brands to save money as the economy continues to improve, even slightly. THS management wants to be the largest private-label brand supplier in its categories so this trend works well for it.

More numbers: Market Cap is $1.35 billion. Forward P/E is 14. Price to book is 1.85. Book value is $23.83. Operating margin for the last 12 months was 8.19% while Profit margin was 5.38%. Return on assets was 5.65%. There's only $4.41 million in cash or 14 cents a share. Total debt is $402.55 million. Current ratio is 2.48. Beta is a very mild .41. Over the last 52 weeks, the stock was as low as $26 and as high as $45.99. There are 32 million shares outstanding. Insiders own 1.74% of them while Institutions have 95.70%. There is no dividend.

Most investors will find this stock to their liking. Management has consistently delivered higher earnings since 2005 (the company went public in 2005). Sales and profits should be noticeably better this year (as the stock already reflects), but if new acquisitions are made, expect analysts to raise their estimates. This is a stock worthy of more investigation by most investors.

- Company Web site: www.treehousefoods.com

- Ted Allrich