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Fresh Del Monte Produce Inc. Message Board

  • undermindu2 undermindu2 Apr 28, 2009 12:42 PM Flag

    Intrinsic value over $21 a share - no brainer!!!

    Stocks return to their intrinsic values...I am staying long until $21.

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    • how do you get to $21 if you dont mind me asking? Thanks.

      • 3 Replies to skiselev81
      • I have ValueLine publications....I can also take the last ten year's worth of earnings and average it out. Comes to $2.12 over that time period. Then take the average PE over that same ten year time period. Comes to about a PE of 10. Times the earnings by the PE and you get $21.20 a share. This was is more conservative than the first and relies on history - not future earnings like the other method I mentioned earlier. I actually prefer this method of finding intrinsic value. Great balance sheet here.

      • Take this year's earnings $2 conservative & times by the next 5 years ave. growth rate per year. Somewhere around $20 smackers.

      • 21 is a fair price.

        Tangible book value is 18. Counting goodwill book value is about 24. Let's stick with tangible though. Before this sell-off last fall in the overall market it would be almost unheard of for a company that is profitable to trade below book value ($18) but in this market, it's commonplace.

        Patience will see an eventual return above 20 for FDP. It may take a year (or longer) but it's a solid company. Should make $1.50-$1.75 this year (70 cents next quarter is my guess based on conference call) and if this turns out to be a trough year, then 20 will be easy to break next year.

        If not a trough year, then of course even more patience will be needed.

        BTW...Look for a possible downgrade in the morning and more short term weakness.

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