Sat, Feb 28, 2015, 10:10 AM EST - U.S. Markets closed

Recent

% | $
Quotes you view appear here for quick access.

Fresh Del Monte Produce Inc. Message Board

  • hulksweider2000 hulksweider2000 May 5, 2006 1:19 PM Flag

    huge debt

    kept me for buying this at higher levels - and now with a dividend cut - still no compelling reason to buy here -

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I guess you are just one helluva conservative guy/gal because 37% D/E ratio is not terrible by any stretch. There are more compelling reasons not to buy this stock. Having said that, this company is still making money. If annualized the EPS from the past, awful quarter and assume no growth ever, you still get a 10 yr earnings stream that is worth $7, which implies that BV is 100% overstated from its true value.

      Alternatively, if you assume that the Goodwill is worthless but that the plants, ships and the license to the name, etc. is worth at least BV, then the stock, with $1 in eps for just the next 10 years is worth $22 with any growth or earnings beyond 10 years being free.

      I think the dividend cut was a poor move, not just because it hurt shareholders, but because they could have easily gone to the bank to get the covenants relaxed and found the extra cash by getting working capital back under control and reigning in SG&A. Bringing SG&A as a % of sales back down to historical levels, would have freed up $40 MM in cash. Working capital is similar, they have tied up over $100 MM of wc to support an extra $300 MM of sales...just awful. That they just cut the div without trying to tighten wc and sga is just another sign that these guys are disdainful of public shareholders.

      I think you will see a raider emerge or a mgmt-proposed buyout offer (which means a lawsuit).

      • 3 Replies to pdnnyc
      • close to $6.00 per share in debt - and where did the cash for the failed stock buy back come from - did they deplete all of their cash?

      • "...I think the dividend cut was a poor move, not just because it hurt shareholders, but because they could have easily gone to the bank to get the covenants relaxed and found the extra cash by getting working capital back under control and reigning in SG&A. Bringing SG&A as a % of sales back down to historical levels, would have freed up $40 MM in cash...."

        The problem is, their agressive expansion of the prepared foods business requires considerably higher sg&a, since they have to promote and protect brands against serious competition. That's why I finally got out in Feb. after two years having a position in this stock. Still tracking though, to see where they are going.

      • You forgot the trucking company and chicken farm that had absolutely no place in the business plan.
        Vertical operations went out 20 years ago but not in the bragging of this company.
        Your numbers are credible but the name is tarnished as good will and it has yet to be established that the company was acquired in a fair and square deal. The lawsuits are still out there.

 
FDP
35.21-0.28(-0.79%)Feb 27 4:04 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.