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Fresh Del Monte Produce Inc. Message Board

  • value_tracker value_tracker Dec 12, 2006 12:41 PM Flag

    Bought More

    I just added a few thousand shares to my position. Granted, I'm still at around $20 as a basis, which is frustrating.

    However, I continue to believe that this business is just going through a rough patch in terms of industry conditions. Rough patches like these have a tendency to resolve themselves through contract negotiations, etc. over time.

    I'm not sure this thing will ever be the $30-50 that Motley Fool once predicted. However, I believe that in 18 months, with higher pricing, their current CEO focus on cutting overhead, rationalizing operations, and most importantly, a complete cultural shift from sales growth at any price to existing ANY unprofitable contract, period, we will see a return to making $2 per year, and a return to a share price of $20-25.

    It might go lower, and I might buy more if it does. But I think this unloved stock is undervalued right now, perhaps not by a lot, but definitely undervalued. I knew it was a longshot, the lawsuit that was dismissed, but it was a catastrophic loss if it succeeded, and in my opinion, it's removal represented at least $2 per share in my opinion.

    Anyway, good luck to all longs or shorts. I like being aligned with this family, because I think they really are motivated to turn this thing around, and when they do, we're going to see between $20 and $30 per share.

    - Value Tracker

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    • I also added to my position. My average cost basis is about $17.50. I see a better than even change that the stock reaches $25 this year. I also own CQB and several other food producers. I see a large substition effect out of higher priced oranges, grapes, corn etc towards relatively lower priced items such as bananas and pinapples.

    • Reminds me of a story.
      This guy bought a stock on the recommendation of his broker. He kept adding to his position.
      He asked his broker, "how are we doing?" His broker told him, "the stock is doing great!" This went on for many months, guy bought more stock, broker told him everything is great, the stock is going up.
      After 8 months the guy looks in the papers and sees that his stock is down. Next week checks the papers and sees that the stock is down even more. He calls up his broker and asks, "What happened to my stock?" "Why is it going down after you told me that it was doing so good?"
      The broker replied, "It was doing good until you stopped buying the stock!"
      Don't be the only person interested in FDP.
      You may end up buying yourself into oblivion!

    • I think you are on the money. We bought in yesterday. Think the stock has bottomed out here. We have been watching this decline for some time now. I day traded the stock many times between $24 and $25. We will be back there soon!
      Good Luck !

 
FDP
33.35+0.92(+2.84%)12:45 PMEST

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