Is TreeHouse Foods Stock Going to be the Next Big Turnaround Play?

TreeHouse Foods, Inc. (NYSE:THS) is a multinational food processing company specializing in producing private label packaged foods. The company manufactures and distributes private label packaged foods and beverages at more than 40 production facilities across the U.S., Canada, and Italy.

On March 22, TreeHouse Foods announced that its Board of Directors had elected Ann M. Sardini as Chair of the Board. This leadership change will reportedly become effective as of April 2021, during TreeHouse Foods’ annual stockholder meeting. Sardini had served as an independent TreeHouse Director since May 2008.

The food giant was last seen up 1% at $53.92. THS has seen minimal growth over the past week amidst the leadership news. However, TreeHouse stock has already increased a significant 26% year-to-date, 39% year-over-year, and has grown 53% since its 11-year low of $35.15.

In 2020, TreeHouse foods was among the companies that benefitted from the Covid-19 pandemic. The company increased revenue by about $60 million, or 1.4%, bringing its total revenues up to $4.35 billion. TreeHouse Foods also added nearly $375 million to its net income, pushing the company into profit territory. 

However, from a fundamental point of view, TreeHouse Foods is not an ideal investment. Despite the company's strong performance over the past year, THS revenues have been declining drastically in recent years. Since fiscal 2017, TreeHouse Foods has lost nearly $2 billion, marking more than a 30% decrease. In addition, TreeHouse Foods' bottom-line has a history of instability, with the company reporting huge net losses fairly often.

Overall, investors should remain cautious and not be fooled by just one decent year amidst a global pandemic. The best route for those considering adding TreeHouse Foods stock to their portfolio as a turnaround play is to wait for the company’s next two earnings reports and assess a continued trend of positive performance.