Are you familiar with Treehouse Foods (NYSE: THS)? They provide private label packaged goods to grocery stores. Back in November, the stock got slammed when it missed earnings. At its current price, I love Treehouse Foods and in this post, I am going to walk you through the reasons why long-term investors are foolish to overlook this stock.

Treehouse Foods For The Long-Term Investor

Before I get into the details of why I think this stock is a screaming buy, I need to be clear on what I mean by long-term investor. This stock isn’t going to recover and trade above $65 a share for some time. So any investor looking to make a quick return on their money needs to look elsewhere.

Treehouse Foods is for the patient investor who is comfortable buying shares at these low levels and holding for a couple of years while the company turns itself around.

Now that we have gotten that out of the way, let’s look at what this stock has going for it, as well as what it doesn’t.

The Bad News For Treehouse Foods

I like to get the negatives out of the way first. To understand where things went wrong for this company, we have to go back to November. The company reported earnings that missed internal guidance for what they expected they would earn.

At the same time, they lowered their guidance for the full year. And if that wasn’t bad enough, the CEO resigned out of the blue as well.

So now Treehouse Foods has to find a new CEO as well as tackle the issues the company is facing.

The issues they face include:

• Reducing operational costs
• Reducing number of suppliers
• Shifting product mix
• Standardize process

The Good News For Treehouse Foods

Now that we got the bad news out there, what good news does the company have? For starters, private label brand sales continue to rise. As more retailers add shelf space for private label foods, Treehouse Foods can pounce on this opportunity.

In addition to this, the company is a leader in the categories that it has products in versus other private label brands.

Furhtermore, Treehouse Foods has a solid representation of sales from all income brackets. This includes those making less than $20,000 annually to those earning over $100,000.

Finally, the company knows where they are falling short in terms of operational efficiency. This is a positive since so many companies who are struggling refuse to see the writing on the wall. Treehouse Foods knows what is causing its revenues to stall and keeping its stock price down.

The Future For Treehouse Foods

So what does the outlook for Treehouse Foods look like? In the short term, it isn’t too rosy. After all, it will take time for the company to change up its operations process so that it becomes more streamlined.

Add to this the search for a new CEO and we could be talking at least a year until we begin to see meaningful results from the company.

But once they have the new efficiencies in place, they should be able to quickly rebound and grow further. And just for the record, I don’t feel as though Amazon entering into the grocery space will have any negative impact on the company.

Final Thoughts

Overall, Treehouse Foods is a great buy for the long-term investor who wants to reap share price appreciation. For the next several months, you can take your time adding to your position before the stock will begin to rebound.

And all signs point to it rebounding in the future. Treehouse Foods is a solid company with solid future prospects. It just has to finish navigating the rough waters it is currently experiencing.