There were 22 new 52-week lows on the New York Stock Exchange on Tuesday compared to 69 new 52-week highs. Among the 22 companies hitting new lows, UK frozen foods producer Nomad Foods (NOMD) caught my attention.
The company, whose frozen food brands include Birds Eye, Findus, and Iglo, slid to its 18th 52-week low on Tuesday. It last traded this low in October 2023.
Publicly traded since 2014, the shares have ranged between $10 and $31.85 (May 31, 2021, all-time high). Although the business has struggled over the past year, with its shares down 25%, the company's stock should attract bargain-seeking investors for several reasons.
Here’s why I feel this way.
An Early SPAC
Nomad went public in April 2014 as a SPAC (special purpose acquisition company), raising $500 million in its initial public offering, trading on the London Stock Exchange. Like most SPACs, it was formed to acquire an operating business within a specific time frame.
The SPAC made its qualifying acquisition in June 2015, paying 2.6 billion euros ($3.04 billion) for Iglo Food Holdings Limited, a leading European frozen foods company. That brought the Birds Eye and Iglo brands into the fold.
Five months late in November 2015, it acquired the Findus Group for 500 million British pounds ($677 million), paid for with 415 million British pounds ($562 million) in cash and issuing 8.38 million shares of its stock. That brought the Findus brand to the growing frozen food business.
Nomad issued the initial SPAC shares at $10 in April 2014. They were delisted in London on Jan. 11, 2016, switching their listing to New York the next day. The share price closed its opening day at $12.30. They’re up just 15% in the decade since. Fortunately, for early investors, it has paid an attractive dividend, or the annual return would be abysmal.
However, one of the founders of the SPAC was Martin Franklin, best known as the CEO who grew Jarden Corp. from nothing over 14 years, selling it to Newell Brands (NWL) in April 2016 for $15.4 billion ($60 a share), which included $2.2 billion in convertible debt.
Franklin probably wishes he had gotten more than $21 a share for the cash portion of the deal, given how poorly Newell stock has performed over the years. However, he sold his shares in 2017 and 2018 when they were much higher than today, due to disagreements with management and the board.
I’ve always liked the way Franklin thinks. He co-founded the Nomad SPAC and still owns 6.7% of its stock and serves as Co-Chairman of the Board. That’s a good thing.
Its Head Remains Above Water
Nomad delivered its Q2 2025 results in early August.
They weren't anything to write home about with sales down 0.8% to 747 million euros ($875 million) from 753 million euros ($882 million) a year earlier. Meanwhile, its operating profit was 88 million euros ($103 million), 13% lower than 101 million euros ($118 million) in Q2 2024.
Looking out to the end of 2025, the company revised both its top and bottom lines lower as a result of the tough first half of the year. It now expects organic sales to range from flat year-over-year to a couple of percentage points lower. Previously, guidance was flat to 2% higher. On the bottom line, Nomad’s 2025 EPS estimate is 1.70 euros ($1.99) a share at the midpoint of its guidance, down from 1.86 euros a share ($2.18) previously.
Despite the lower guidance, it still expects to convert 90% of its adjusted earnings to free cash flow in 2025. Based on 152.6 million shares outstanding, that’s approximately $304 million in adjusted free cash flow.
Between Q3 2022 and Q2 2025, the company’s net debt has stayed in a tight range between 2.15 billion euros ($2.52 billion) and 1.74 billion euros ($2.04 billion). It ended the second quarter at 1.84 billion euros ($2.16 billion), well within historical norms.
Meanwhile, its net debt is 3.5 times EBITDA (earnings before interest, taxes, depreciation and amortization), a relatively low multiple over the company’s 10-year history as a public company. Financially, despite a distressed Altman Z-Score of 1.40 according to S&P Global Market Intelligence -- the score indicates the likelihood of a company undertaking bankruptcy proceedings in the next 24 months -- it is one of the highest since listing on the NYSE in 2016.
Financially, it’s head is above water.
The Case for Buying Nomad Stock
The company has faced several headwinds in the first half of 2025 that have held its organic growth back. One of these headwinds is exceptionally warm weather in most of Europe. In the UK, for example, spring temperatures were 18% higher this year than the historical averages. That’s led to lower consumption of frozen foods.
However, the frozen food market is expected to be one of the more reliable growth areas in the food business in the years ahead.
“The Frozen category has outgrown the overall food industry by nearly one percentage point over the past decade, and in our top four markets where we can access total industry data, not just frozen food data, we saw the Frozen category outpace overall Food volume sales last quarter by 60 basis points, despite the unfavorable weather,” stated CEO Stefan Descheemaeker in the Q2 2025 conference call.
Nomad’s current enterprise value of $4.28 billion is 1.31 times its latest 12-month sales. This multiple has never been lower. The same thing for any of its earnings-focused financial metrics. They’re also at historical lows.
For every argument that’s made about frozen foods not being healthy for you, there’s an opposite argument, especially with fruit, that freezing them at the fields retains more of the nutrients than so-called “fresh” produce you find in the grocery store.
While I’m no expert, I don’t see frozen foods going away anytime soon.
On Sept. 3, Nomad announced an efficiency program over the next three years that will see it generate annual operational savings of 200 million euros ($234 million) by the end of 2028. Combined with 1-3% annual growth in adjusted EBITDA and 15% growth in free cash flow, the current valuation seems exceptionally low.
Provided Nomad meets its plans for the next three years, receiving a nearly 5% dividend yield while waiting for it to reach its medium-term goals is a reasonable risk/reward proposition.
At a 52-week low, Nomad stock is a buy.
