B&G Foods Shares Popped: What You Need to Know

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of B&G Foods (NYS: BGS) jumped as much as 11% in trading today and hit a new 52-week high after the company made a dashing acquisition.

So what: B&G is buying Culver Brands from Unilever for $325 million in cash, a giant deal for the company. Culver's brands include Mrs. Dash, Molly McButter, Bakers Joy, and Static Guard.

Now what: Culver had just $90 million in revenue over the past year and even though this is a high margin business that's a steep price to pay for B&G. Management did say that it expected the acquisition to add to free cash flow and earnings immediately. The market may be cheering the move today, but I'm not seeing great value in this acquisition or in B&G's shares right now, so I'm going to pass on being bullish today.

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At the time thisarticle was published Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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