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Papa Murphy's stock soars post-acquisition announcement

The stock value for Papa Murphy's soared up to late 2017 levels last week after Wall Street learned of the chain's pending $190 million acquisition with MTY Foods. Meanwhile, on the commodities front, vehicle fuel prices continued their pre-summer escalation, while pizza brands got a break from lower natural gas prices.

April 15, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

The stock value for Papa Murphy's soared up to late 2017 levels last week after Wall Street learned of the chain's pending $190 million acquisition with MTY Foods. Meanwhile, on the commodities front, vehicle fuel prices continued their pre-summer escalation, while pizza brands got a break from lower natural gas prices. 

Cheese

Cheese barrels closed at $1.62, while 40-pound blocks closed $1.65 Friday. The average for barrels for the week was up 2 cents to $1.60, while blocks were off nearly 1 cent on average, at $1.65. 

According to the U.S.D.A. Agricultural Marketing Service, some Western cheese producers are trying to curb production in order to get ahead of omnipresent, long cheese inventories. Nonetheless, Midwestern cheese plant managers have increased production in order to meet increased demand needs. 

Overall, the U.S.D.A. said that cheese market tones have its contacts relatively optimistic, following a tumultuous 2018, and early 2019, for the key pizza commodity. 

Wheat

Compared to last week, cash bids for wheat were mixed, from 10 cents lower to 26 cents higher. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 1 cent lower, from $5.65 1/2-$5.75 1/2 per bushel. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted.  

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 7 to 10 cents lower, from $4.92-$4.96 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 21 to 26 cents higher, from $6.53 1/4-$6.58 1/4 per bushel.  Portland U.S. Soft White wheat rail was steady, from $5.90-$6.05 per bushel.

Vehicle fuel

The American Automobile Association said in the U.S., "summer-like" gas demand is keeping that price per gallon inching ever upward. The average price paid for a gallon of regular today is $2.83, up 9 cents from last week, 30 cents from last month and even 12 cents higher than the price we paid a year ago at this time. Mid-grade and premium gas followed that same trajectory. 

Diesel meanwhile remains at $3.07, as it was a day earlier. That's up about 3 cents from last week and 7 cents higher than a year ago. E85 average price this morning rang in at $2.44 a gallon, up 7 cents from last week and well over the $2.27 we paid last year. 

Natural gas

Although natural gas spot prices fell at most locations over the seven days that ended on April 10, the U.S. Energy Information Administration reported that Henry Hub spot prices rose from $2.67 per million British thermal units to $2.69/MMBtu on April 10.

At the New York Mercantile Exchange (Nymex), the price of the May 2019 contract increased 2 cents, from $2.68/MMBtu to $2.70/MMBtu yesterday. The price of the 12-month strip, averaging May 2019 through April 2020 futures contracts, climbed 3 cents/MMBtu to $2.88/MMBtu.

Net injections to working gas totaled 25 Bcf for the week ending April 5. Working natural gas stocks are 1,155 Bcf, which is 14 percent lower than the year-ago level and 30 percent lower than the five-year (2014-18) average for this week.

According to Baker Hughes, for the seven days that ended on April 2, the natural gas rig count increased by four to 194. The number of oil-directed rigs rose by 15 to 831. The total rig count increased by 19, and it now stands at 1,025.

Pizza company stocks

Investors clearly liked last Thursday's news that MTY Foods will acquire the U.S. take-and-bake pizza chain, Papa Murphy's, as evidenced by the stock's upward advance at the end of the last week's trading. Shares of Papa Murphy's closed up a hefty $1.35 to $6.44 Friday on the Nasdaq. That's a price the chain hasn't seen for nearly two years.

Also on the Nasdaq, Papa John's stock value settled a bit after its gradual rise of the last few weeks, following news of corporate management and ownership changes. That stock closed Friday at $50.19, down $1.74 at $50.19. 

But for competitors at the world's first and second-largest chains, Domino's and Pizza Hut, investors showed their confidence in the brands by raising Domino's value at the close Friday at $257.61, up $3.05 over the previous week's close. That brand's leaders joined Pizza Hut executives in the proverbial "party room" after the markets closed Friday, after Pizza Hut parent, Yum Brands closed up $1.44 over the previous Friday, at $101.40. 
 

Photo: iStock

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.