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Fresh Del Monte Produce Inc. Message Board

  • Emel_ Emel_ Jul 28, 2009 8:27 PM Flag

    Still a Bargain...

    I originally considered 20 my target price, but that's just too cheap.

    With today's earnings of $1.11 Fresh Del Monte is now likely to make around $2.50 per share this year. That's a P/E of less than 9.

    Factor in a hard book value is $19 (goodwill enhanced book value is $25.) A melon glut that's abating. Debt is very, very low at 350M (part of the reason they received such a favorable interest rate last week with the LOC renewal.) Over 50% of the revenues are international makes for a very nice hedge against a longterm weak dollar. Plus, being in the food industry, FDP is really situated nicely for this economy....and the malaise coming.

    That doesn't mean Fresh Del Monte will continue rallying from here. It might very well sell-off back to high teens (especially in weak market this fall), but looking out longterm, this stock is still cheap. A challenge of the old highs in not out of the question in the next 24 mths.

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    • If you think FDP is a bargin, just look at CQB @ $15.30-$16 range. Made huge profit last qtr. & guidance looks great. Due your own due diligence before investing.

      I'm holder of CQB stock and happy with my position. Been watching FDP for some time.

      Good luck all!

    • emel:

      I agree with your assessment on FDP. I'm a holder of CQB & believe they will also go higher. Even though their down approx. 50 cents today along with FDP, JMHO, believe they both will do well over the next few months.

      Good luck with your investments.

      • 1 Reply to bookerone2000
      • I've always followed them both. They will both generally track each other. Chiquita though will have more extreme moves up and down due to debt levels. I prefer to trade Chiquita (sold too soon recently though) and to own Fresh Del Monte.

        Main reasons:

        1) FDP owns land. Although they are not realizing the full benefit of the farmland currently due to commodity market, they will eventually. Chiquita is benefit for the time being from the weak ag market.

        2) FDP has much less debt and tangible book value. If something goes seriously wrong in the industry or overall economy, FDP will drop to maybe 10-12 while CQB might not survive so easily due to the debt and no book value.

        Like I said though, they should both track each other (especially now that CQB has reversed its debt worries) and should both do well, but I just feel much more at ease with Fresh Del Monte.

    • $2.61 earnings projected for next year places a $30 to $32 value on FDP stock price.

      I agree. Underpriced.

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