Pilgrim's Pride is a multinational corporation that employs about 38,000 people and has operations in 12 states, Mexico, and Puerto Rico. It has the capacity to process about 36 million birds per week, resulting in almost 9.5 billion pounds of chicken annually. Pilgrim's Pride is a supplier for Kentucky Fried Chicken, as well as Walmart, Publix, and Wendy's, and is the exclusive rotisserie chicken supplier for Costco. This often contentious company, which experienced financial trouble in 2008-2009, appears to be back on top as shares of PPC have rallied past 15-year resistance at around the $40 level, with shares recently priced at $54. After detecting strong rotations from consumer discretionary stocks into the staples sub-sector, we wanted to take a hard look at the SIA U.S. Consumer Staples Sector Index Report and found some interesting standouts. One such stock is PPC, where the SIA platform has detected shares gaining in relative strength against both other names within the staples sector and the SIA Russell 1000 Index Report, where it can be found in position #76 in the favored zone. On the SIA U.S. Consumer Staples Sector Index Report, it holds position #11, with share performance showing an 18.97% year-to-date increase.
The point and figure chart attached, scaled at 5%, provides a full view of the trading history of PPC. It shows the massive collapse of the shares in 2008-2009, as well as the very long duration consolidation between $15 and $40, during which shares took one step forward and one step back for a decade of sideways action, with little gain for long-term buy-and-hold investors. However, the action in the later part of 2024 and the early days of 2025 has been excellent, characterized by improving relative strength and a massive breakout past long-term resistance. Currently, there appears to be little resistance on the point and figure chart all the way up to $125 and $160. While one could argue that Pilgrim's Pride is a different company post-restructuring, there might be shareholders eager to see prices return to levels they entered at many years ago. Therefore, one could expect strong resistance at these levels. On the other hand, support is quite tight, with various bands of support (old resistance) at $40.92, $37.12, and $32.06. Finally, the SIA SMAX is currently displaying a perfect score of 10 out of 10, indicating a near-term reading of relative strength against a basket of other asset classes beyond the relative strength readings captured within the SIA report.
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