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Smithfield Foods, Inc. Message Board

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  • richmondinvestor richmondinvestor May 24, 2003 9:35 AM Flag

    $20 is fair for now

    Saw your comment referring to Value Line. As I have seen other posters state and they now reflect my opinion as well, "use the Value Line pages to line your bird cage bottom". They are absolutely the worst predictors of stock prices. I used them for years...and lost a ton. If they state SFD is going to be flat...I would bet a contrarian view to them. They have zero foresight. Only history. Bet they never even speak to the CFO or other Company management to discuss future direction.

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    • I am long SFD, but unloaded about 30% of my position at $19.61 to diversify into stocks that may grow better in the next 2 years.

      I feel we are heading into a better time to make money in the market. SFD has held up relatively well, but does not perform when the overall market rises. It is tied to the price of hogs.

      As always, if you can pick good stocks you will outperform the averages. Value Line is a conservative tool to consider. I would not blindly follow any one source for guidence. In order to make money you need to consider many variables and be disiplined to hang on when times are tough and bail if the story changes. You also need some luck since the market in the short term is very irrational. It seems the market wants to go up now. Economic conditions are improving and after the summer doldrums you should be fully invested. I am going to use the summer to thumb through the pages of Value Line, read the Wall Street Journal, and Barrons, research trends and good companies and load up!

      Good luck!

      By the way, do you use any research tools or analysis?

      • 1 Reply to long_sage
      • Long sage: You ask a very good question regarding research tools and analysis. First of all I had stayed away from broker recommendations for several years...even before they were required to divest their research operations from the brokerage. Regarding SFD...like you I use the WSJ to monitor the futures market. I follow Yahoo data for tracking the 200 and 100 day averages. Most importantly, I track the internal news releases published for SFD employees (which I am not). Also, I follow the trends and product lines of the competitors. I have been accumulating SFD shares for over 20 years and follow the Joe Luter advice...buy when the cycle is down. I wish, however, I would have followed the second half of the advice (sell when high). Consequently, I have missed a lot of profit taking opportunities. I look for SFD to hit 26 to 27 later this year. Might be a good time to sell at that point. Hog prices strongly influence this stock and they are heading higher. Farmland can add an additional 2-3 dollars per share too.

 

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