However, the company also has a problematic private label division, where it makes store-brands for various supermarkets. Unfortunately ConAgra has been unable to fend off competition that wants to take share in this market, because private labels have gone out of style and there is nothing proprietary about the business.
That is also the reason why ConAgra's management, under pressure from activists at Jana Partners, decided to sell the laggard private label division earlier in the summer and it sent the stock soaring.
Fast forward to Tuesday, when ConAgra reported a solid quarter. It missed Wall Street's revenue estimates, but delivered a 5 cent earnings beat from a 40 cent estimate. Guidance for next quarter was in line for what analysts were looking for.
So then why was the stock crushed?
That pesky private label business complicated everything. Because ConAgra plans to sell this division, it had to bracket its results under discontinued operations. It also had to write down the value of the private label business by $1.95 billion, which amounts to a loss of $3.23 a share. Ouch.
That was the third write-down in a short period of time. Thus investors were worried that ConAgra might not be able to sell the private label division for as much as they initially thought.
The worst part is that ConAgra had the misfortune of reporting on the same day Volkswagen's turmoil broke in the news, commodities collapsed and the market took a nosedive.
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"I think that if ConAgra had reported on a good day…instead of right in the middle of a hideous market-wide decline, then the initial reaction to its quarter would have been a lot less negative," Cramer said.
At the end of the day, Cramer thinks ConAgra is looking like a solid company that will get stronger once it sells that private label business. Once that happens, it could have about $3 billion for an expanded buyback or increased dividend.
"When you sift through everything, there are a lot more positives than negatives here," Cramer said.