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Chiquita Brands International Inc. Message Board

  • pastemp pastemp Dec 16, 2011 10:38 PM Flag

    Bankrupcy

    With the move to North Carolina CQB now has the opportunity to go BK for the 3rd time;each time in a different state.

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    • With the stock hitting a new 52-week low (dropping below $5), you may be right... As I just cost-averaged by picking-up some dirt-cheap shares, I'm hoping the summer fruit season will provide a bounce, or acquisition... Maybe BGS will want some fresh fruit for their All Fruit.

    • I dont suspect BK is in the books anymore, they generate enough cash flow annually to cover the remaining debt over the next few years. I do think, though, that this junk stock goes significantly lower. The loss estimate is only 11 pennies for this quarter, I suspect the loss will be closer to 50 cents. The extremely weak euro, coupled with the fact that banana pricing is not rebounding at the pace analysts expected so far AND for the fact that the salad business is continuing to lose market share to private label (as well as a continuous deterioration of salad pricing) will all get this to the new 5 year lows over the course of 2012. It is tough to say this since i am now caught in this value trap along with many others, but that is now my belief about where this company is headed, unfortunately. I suspect going forward they can make a normalized EPS of ~$1...with a 7x multiple we can see a $7 stock long term...but in the meanwhile, while the market digests this new operating environment for this junk company, it will head significantly below its fundamental value...amazing how much value destruction this management team was able to create (especially with a completely moronic overpayment for fresh express a few years ago). About four years ago, the normalized eps power was ~$2.50 based on the calculations I used to do with my previous fund...incredible value destruction at play over the past few years...

 
CQB
10.14-0.04(-0.39%)1:04 PMEDT

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