Industry Overview - The AgTech and food innovation sector is experiencing significant transformation as technology adoption accelerates in farming, food production, and distribution, focusing on sustainability and efficiency [1] - Structural pressures such as climate volatility, labor constraints, and rising input costs are driving the need for innovation, with consumers increasingly favoring transparency and responsible sourcing [2] Digitization and Technological Advancements - A major trend is the digitization of farm operations, with precision agriculture, connected machinery, and real-time analytics optimizing yields while minimizing waste [3] - Companies like Deere & Company are central to this shift, utilizing GPS-guided equipment and data platforms to enhance productivity [3] Food Innovation Trends - Food innovation is evolving as producers adapt to health-oriented diets and sustainability considerations, influencing product development strategies [4] - Tyson Foods is investing in alternative proteins and automation to align its offerings with long-term consumer trends [4] Investment Opportunities - The AgTech and Food Innovation sector presents compelling investment opportunities as companies balance short-term volatility with long-term necessity [5] - Key players such as Corteva, Beyond Meat, and Ingredion are highlighted for their alignment with trends in precision agriculture and protein demand [6] Company Insights: Corteva - Corteva is positioned as a leader in AgTech, focusing on advanced seed genetics and crop protection solutions to meet rising demand driven by climate variability and pest pressures [7] - The company is rolling out new hybrids and investing in gene editing technologies to accelerate innovation [8] - Corteva's initiatives include developing environmentally aligned crop protection solutions, reinforcing its role in the AgTech ecosystem [9] Company Insights: Ingredion - Ingredion is focusing on clean-label ingredients and functional nutrition, responding to inflation and shifting consumer preferences [11] - The company's Texture & Healthful Solutions segment is experiencing solid growth, particularly in clean-label ingredients and protein fortification [12] - Ingredion is also advancing food innovation through targeted solution development and technology adoption, including sugar reduction technologies [13] Company Insights: Beyond Meat - Beyond Meat is adapting to changing protein consumption patterns by focusing on health, sustainability, and resource efficiency [14] - The company is enhancing the nutritional quality of its plant-based proteins, aligning with consumer demand for transparency [15] - Beyond Meat's innovation strategy includes faster product iteration through the Beyond Test Kitchen and ongoing supply-chain improvements [16]

Core Insights - Ingredion Incorporated has been named to the 2026 FORTUNE World's Most Admired Companies list for the 16th time, highlighting its leadership in innovation, operational excellence, and sustainability [1][2]. Company Overview - Ingredion is a leading global provider of ingredient solutions, serving customers in nearly 120 countries with annual net sales of approximately $7.4 billion in 2024 [4]. - The company transforms grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for various markets, including food, beverage, animal nutrition, brewing, and industrial sectors [4]. - Ingredion operates innovation centers globally and employs over 11,000 people, focusing on co-creating with customers to enhance the quality of life [4]. Recognition and Reputation - The FORTUNE World's Most Admired Companies list is considered a definitive report card on corporate reputation, evaluated by top executives, directors, and analysts based on nine key attributes [2]. - Ingredion's recognition reflects the commitment of its employees to create value for customers and improve the taste of healthy foods [2][3].

Core Viewpoint - Ingredion Incorporated is set to release its fourth quarter and full year 2025 financial results on February 3, 2026, before market opening [1] Group 1: Financial Performance - The financial results will cover the period ended December 31, 2025 [1] - A conference call will be held on February 3 at 8 a.m. CT to discuss the financial performance [2] Group 2: Company Overview - Ingredion is a leading global ingredient solutions provider serving customers in over 120 countries [3] - The company reported annual net sales of approximately $7.4 billion for 2024 [3] - Ingredion transforms grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for various markets including food, beverage, and animal nutrition [3] - The company operates innovation centers called Idea Labs and employs more than 11,000 people [3]

Core Message - Ingredion Incorporated has launched its first custom-designed railcar wrap to support the American Heart Association and promote heart health [1][2]. Group 1: Company Initiatives - As part of its long-term sponsorship of the American Heart Association's Heart of Chicago campaign, Ingredion introduced a custom-wrapped GATX railcar featuring the "Move More!" message to encourage physical activity among Americans [2][3]. - The railcar serves as a mobile message promoting the importance of regular physical activity, which is one of the American Heart Association's Life's Essential 8 measures for improving cardiovascular health [2][3]. Group 2: Partnerships and Community Engagement - Kimberly Bors, volunteer chair of the American Heart Association Board of Directors in Chicago, emphasized that support from Ingredion and GATX helps share important health messages and advance the Association's mission [3]. - Paul F. Titterton, executive vice president of GATX Rail North America, highlighted the value of collaboration and community engagement in championing causes that make a difference [3]. - Eric Seip, senior vice president of Ingredion, expressed pride in sponsoring the Heart of Chicago Campaign and emphasized the company's commitment to heart health and community well-being [3]. Group 3: Company Background - Ingredion Incorporated, headquartered in the suburbs of Chicago, serves customers in over 120 countries and reported annual net sales of approximately $7.4 billion in 2024 [4]. - The company specializes in turning grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for various markets, including food and beverage [4].

Core Insights - Palm Valley Capital Fund reported a 0.66% appreciation in Q4 2025, underperforming the S&P SmallCap 600's 1.70% gain and the Morningstar Small Cap Total Return Index's 3.12% rise [1] - The Fund increased its allocation to Treasury bills from 74.1% to 76.3% during the quarter, while equity holdings rose by 1.12% [1] - Investments in precious metals, particularly silver, positively influenced equity performance, which has been a significant allocation for the Fund in recent years [1] Company Highlights - Ingredion Incorporated (NYSE:INGR) was highlighted as a key stock in the Fund's Q4 2025 investor letter, with a one-month return of 3.89% and a 52-week loss of 16.81% [2] - As of January 5, 2026, Ingredion's stock closed at $110.41 per share, with a market capitalization of $7.086 billion [2] - The Fund initiated new positions in Ingredion, along with Domino's Pizza Group plc and Utz Brands, with modest initial weightings due to reaching minimum required discounts [3]

Industry Overview - The food industry is demonstrating resilience as 2025 concludes, with food inflation cooling but prices remaining high, leading consumers to focus on value [1][2] - Many consumers are trading down to affordable brands and limiting discretionary dining, impacting volumes for some packaged food and restaurant companies, although pricing actions have stabilized revenues [1][2] Company Performance - Companies with established brands, wide distribution networks, and strong cost control are better managing input and labor pressures, with product innovation in protein, convenience foods, and health-focused options attracting consumer interest [2][3] - Supply-chain conditions have improved, allowing companies to operate more efficiently, and foodservice demand is stabilizing, setting a positive tone for 2026 [2] Growth Expectations - Growth expectations for the food industry remain modest, with volume rebounds unlikely but margin improvements anticipated as cost pressures ease [3] - Companies are focusing on efficiency, automation, and smarter portfolio management while leveraging strong brands to maintain pricing discipline [3] Investment Opportunities - Food stocks are becoming attractive as everyday demand provides a defensive foundation, and improving operating leverage offers potential upside [4] - Companies prioritizing operational discipline, brand strength, and margin recovery are well-positioned to navigate a value-conscious consumer environment [4] Company Highlights - United Natural Foods, Inc. (UNFI) has seen a 47.4% rally in the past six months, benefiting from a multi-year transformation and favorable long-term demand trends in natural and organic food categories [5][6] - UNFI is improving margins through automation, cost discipline, and strong free cash flow, which has enabled debt reduction and improved financial flexibility [6] - The Zacks Consensus Estimate for UNFI's current fiscal-year earnings per share (EPS) suggests growth of 187.3%, with upward revisions in the past 30 days [7] Other Notable Companies - Ingredion Incorporated (INGR) is executing well with steady demand for specialty ingredients, focusing on clean-label and health-driven food trends, which supports margin expansion [11][12] - The Zacks Consensus Estimate for INGR's current and next fiscal-year EPS suggests respective growth of 5.1% and 1.6%, with upward revisions in the past 60 days [13] - Beyond Meat, Inc. (BYND) is working on a turnaround by resizing its cost structure and improving manufacturing efficiency, despite pressure in the plant-based meat category [14][15] - The Zacks Consensus Estimate for BYND's current and next fiscal-year EPS suggests respective growth of 51.5% and 69.6%, with upward revisions in the past 30 days [16]

Core Viewpoint - Ingredion Incorporated has declared a quarterly dividend of $0.82 per share, reflecting its commitment to returning value to shareholders [1]. Company Overview - Ingredion Incorporated is a leading global provider of ingredient solutions, serving customers in over 120 countries [3]. - The company reported annual net sales of approximately $7.4 billion for 2024, focusing on transforming grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for various markets [3]. - Ingredion operates innovation centers known as Idea Labs and employs more than 11,000 people, emphasizing collaboration with customers to enhance life through the integration of people, nature, and technology [3].

Core Thesis - Ingredion Incorporated is viewed positively due to its transition towards higher-growth plant-based proteins and alternative sweeteners, aligning with consumer preferences [3][5] - The company is recognized for its solid profitability and disciplined cost control, despite mixed financial performance [3][4] Company Overview - Ingredion is a century-old food ingredients manufacturer serving various industries, including food, paper, textiles, and biomaterials [2] - The company's share price was $107.68 as of December 2nd, with trailing and forward P/E ratios of 10.78 and 9.51 respectively [1] Financial Performance - Ingredion's five-year annualized revenue growth is in the low single digits, with a 5.2% decline over the past year, underperforming the S&P 500 [3] - The company returned approximately $426 million to shareholders in 2024 through dividends and buybacks, including the repurchase of 1.65 million shares [4] - Owners' earnings have shown mid-double-digit returns over the past five years, while free cash flow growth was more modest at 10.46% [4] Market Position - Morningstar assigns Ingredion a narrow economic moat due to its specialty ingredients business, which benefits from pricing power and customer switching costs [2] - The company is considered a high-quality, dividend-paying small-cap in the consumer staples sector [2]

Core Insights - Ingredion Incorporated (NYSE: INGR) has been identified as one of the overlooked dividend stocks to consider for investment [1] - UBS has lowered its price target for Ingredion from $130 to $119 following disappointing Q3 results and operational challenges [2] Financial Performance - For Q3 2025, Ingredion reported revenue of $1.82 billion, reflecting a 3% decline year-over-year and falling $74.6 million short of analysts' expectations [3] - The company's operating income decreased by 7% year-over-year, while adjusted operating income dropped by 10% [3] - The Food & Industrial Ingredients segment experienced an 18% decline in operating income, primarily due to production issues at the Chicago plant and reduced consumer demand [3] Business Segments - Despite challenges, the diversified business model of Ingredion helped mitigate some impacts, with the Texture & Healthful Solutions segment showing solid sales and operating income growth [4] - Ingredion serves as a global supplier of ingredient solutions for food and beverage manufacturers [4]

Financial Performance - Net income attributable to Ingredion for year-to-date 2025 increased to $564 million from $552 million for year-to-date 2024, including a $90 million pre-tax gain from the sale of the South Korea business in February 2024 [88]. - Operating income increased 10 percent year over year to $796 million for year-to-date 2025 from $721 million for year-to-date 2024, driven by higher gross profit and lower restructuring charges [88]. - Gross profit increased 4 percent to $1,398 million for year-to-date 2025 from $1,342 million for year-to-date 2024, primarily due to lower corn and input costs [88]. - Net sales decreased 3 percent to $5,462 million for year-to-date 2025 from $5,630 million for year-to-date 2024, primarily due to lower price mix from lower raw material input costs [88]. - T&HS net sales increased 1 percent to $1,806 million for year-to-date 2025 from $1,785 million for year-to-date 2024, attributed to higher volumes and favorable foreign exchange impacts [116]. - F&II–LATAM net sales decreased 6 percent to $1,754 million for year-to-date 2025 from $1,866 million for year-to-date 2024, primarily due to lower volumes and unfavorable foreign exchange impacts [118]. - F&II–U.S./Canada net sales decreased 6 percent to $1,550 million for year-to-date 2025 from $1,644 million for year-to-date 2024, driven by lower volumes and unfavorable price mix [120]. Liquidity and Debt - Total available liquidity as of September 30, 2025, was $3.8 billion, including $1.4 billion in domestic liquidity and $2.4 billion in international liquidity [124][125]. - Total debt outstanding as of September 30, 2025, was $1.8 billion, with a weighted average interest rate of approximately 4.0 percent [126]. - The company anticipates sufficient liquidity from available cash balances, future cash flow from operations, and access to debt markets for at least the next twelve months [128]. - The company may need to raise additional capital or incur indebtedness for less predictable strategic initiatives, such as acquisitions [128]. Cash Flow and Capital Expenditures - Cash provided by operating activities decreased to $539 million year-to-date 2025 from $1,000 million year-to-date 2024, primarily due to a $487 million change in working capital [129]. - Capital expenditures for year-to-date 2025 were $298 million, up from $170 million in year-to-date 2024, with full-year capital investment commitments expected between $400 million and $425 million [130]. - Cash used for financing activities decreased to $340 million year-to-date 2025 from $601 million year-to-date 2024, reflecting the absence of commercial paper borrowings [131]. Shareholder Returns - Dividends paid increased slightly to $157 million year-to-date 2025 from $156 million year-to-date 2024, with the quarterly dividend rate rising to $0.82 per share from $0.80 [132]. - The company repurchased 1,036 thousand shares of common stock at a net cost of $134 million year-to-date 2025, compared to 762 thousand shares at a net cost of $87 million in year-to-date 2024 [131]. Other Information - The company entered into a new revolving credit agreement providing a five-year unsecured revolving credit facility with an aggregate principal amount of $1.0 billion, maturing on August 27, 2030 [127]. - The company received proceeds of $255 million from the sale of its South Korea business in year-to-date 2024, compared to $12 million in year-to-date 2025 [130]. - The company has not made any changes to its critical accounting policies and estimates during year-to-date 2025 [133].