An article about McCormick & Co. Inc. in yesterday's Business section misidentified Jack O'Neill. He is an assistant treasurer for the company.
The Sun regrets the error.
McCormick & Co. Inc.'s stock price has risen 22 percent in the last five weeks, raising hopes, eyebrows and debate in the investment community: Is the increase due to a fundamental improvement in the spice company's outlook, or just another will-o'-the-wisp of a notoriously fickle stock market?
The shares of the Hunt Valley-based company languished the last two years -- falling from $29.25 on the first trading day of 1993 to $18.125 about a month ago.
But almost immediately, the stock started rising in irregular spurts, and it finished yesterday at $22.375. Although that was off 12.5 cents from the previous close, it still represents a sharp advance from earlier this year.
McCormick executives yesterday attributed the rise to their recent restructuring and to the company's more aggressive response to a newly invigorated competitor.
In an effort to increase profits, McCormick announced last year that it would lay off about 600 workers worldwide and close two plants.
McCormick Treasurer Jack O'Neil said yesterday the company has won some important new customers -- including the Shop Rite supermarket chain in New York -- that will increase its retail spice sales.
Investors were overly bearish on McCormick stock in the last couple of years and are just starting to view the company more fairly, he said.
In "road shows," or presentations to investors and stock analysts held in December and January, McCormick executives succeeded in persuading analysts to put McCormick on their recommended lists.
McCormick's stock is now selling at about 16 times last year's earnings, above the average 12 to 13 times earnings ratio for the general stock market but below the 18 to 24 ratio typical for food companies, Mr. O'Neil said.
But, he conceded, some of the increase in the stock's value may be due to rumors that McCormick may be a takeover target.
One of McCormick's biggest price jumps -- $1, to $19.75 -- came on Jan. 10, the day after Pillsbury agreed to buy the Pet Inc. food company for $2.6 billion.
"We hear it all the time," Mr. O'Neil said of the takeover theory. "There's always rumors out there."
But he said the company has long stressed that it wishes to remain independent. Besides, he noted, there are several "poison pill" provisions that would make it extremely difficult for someone to buy a controlling share in the company without the approval of McCormick family members and employees.
Duncan Richardson, who manages a portfolio holding a large chunk of McCormick stock for Eaton Vance Management in Boston, said many investors have been shifting their holdings to food company stocks because of uncertainty about the rest of the economy.
"They are somewhat of a safe haven," he said, adding that some investors tend to cycle in and out of different sectors. And since food stocks were out of favor last year, they are considered by some to be trendy this year.
But Anthony R. Gray, chief executive officer of Sunbank Capital Management in Orlando, Fla., said he can't see any fundamental reason for the recent run-up, and so he has sold his company's holdings in McCormick stock.
McCormick is still facing a tougher competitive battle for sales and shelf space since Burns, Philp & Co. bought and poured money into the No. 2 U.S. spice maker, Durkee French Foods, he said.
Sunbank once was one of McCormick's largest investors, he said. But "they kept disappointing us."