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LUCILLE FARMS INC Message Board

  • ian5300 ian5300 Nov 16, 2004 2:01 PM Flag

    Stock was less than $1 Mar 04

    Can anyone tell me why the recovery and why will the price not fall back to $1.

    Thanks

    Ian

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    • There were a plethora of forgotten micro and small-cap stocks leading into the small-cap rally that took place in 2003, and several that have gone unnoticed into 2004. LUCY is a small, inconsistent company riddled with debt, and so for the most part deserved its anonymity - and the market discounted its operations severely. However, several things changed this past year to warrant more attention and a more in-line multiple. One, the rise in commodity prices. This has occured across the board, the commodity market has surged, but since we are talking about LUCY here, we are talking about cheese, and cheese prices have gone through the roof.

      Atkins, some might say? Perhaps. But this whole Atkins debate confuses and obscures a very real trend of inflationary prices across the board when it comes to food commodities - eggs, milk, cheese, chicken, pork, you name it. This combined with increased company sales has lead to some speculators taking interest in LUCY. After all, higher demand + higher prices = moolah. This has lead to some overblown rallies, and yes, some overblown sell-offs. Regardless of the speculation, one must consider the baseline "value" of a stock such as this, taking into account the pricing trend and sales. Ultimately, if both are trending upwards, so will the value of the equity, as well as the stock price, over time.

      That is why it takes patience.

      As Ed has pointed out, the market is a forward-looking instrument. If LUCY were to fall to $1 for any real expanse of time, one would have to summarize that the market expects the price of commodities to fall, and the price of cheese in particular. That, and consider management to have no clue as to how to control costs.

      This does not seem to be the case. Take the hedging program. Look at the commodities action. Look at the volatility of other food commodity stocks. Consider the value of some of them relative to their stock price. Obviously there are buys in there, and there are trades. When a stock overachieves on its price per share relative to value, then I consider it a trade, to be frank. And that was what happened to LUCY when it surged past the $3 mark on no news whatsoever.

      Best of luck in your investing.

      • 2 Replies to bkyser666
      • I'm still depressed, so thanks to Mr
        Bkyser666 analytical thinking. LUCY is
        flat today, no dipping. I'll be patient.
        Mary
        -------------------------------------------

        By: bkyser666 Date: 11/16/04 02:19 pm

        There were a plethora of forgotten micro and small-cap stocks leading into the small-cap rally that took place in 2003, and several that have gone unnoticed into 2004. LUCY is a small, inconsistent company riddled with debt, and so for the most part deserved its anonymity - and the market discounted its operations severely. However, several things changed this past year to warrant more attention and a more in-line multiple. One, the rise in commodity prices. This has occured across the board, the commodity market has surged, but since we are talking about LUCY here, we are talking about cheese, and cheese prices have gone through the roof.

        Atkins, some might say? Perhaps. But this whole Atkins debate confuses and obscures a very real trend of inflationary prices across the board when it comes to food commodities - eggs, milk, cheese, chicken, pork, you name it. This combined with increased company sales has lead to some speculators taking interest in LUCY. After all, higher demand + higher prices = moolah. This has lead to some overblown rallies, and yes, some overblown sell-offs. Regardless of the speculation, one must consider the baseline "value" of a stock such as this, taking into account the pricing trend and sales. Ultimately, if both are trending upwards, so will the value of the equity, as well as the stock price, over time.

        That is why it takes patience.

        As Ed has pointed out, the market is a forward-looking instrument. If LUCY were to fall to $1 for any real expanse of time, one would have to summarize that the market expects the price of commodities to fall, and the price of cheese in particular. That, and consider management to have no clue as to how to control costs.

        This does not seem to be the case. Take the hedging program. Look at the commodities action. Look at the volatility of other food commodity stocks. Consider the value of some of them relative to their stock price. Obviously there are buys in there, and there are trades. When a stock overachieves on its price per share relative to value, then I consider it a trade, to be frank. And that was what happened to LUCY when it surged past the $3 mark on no news whatsoever.

        Best of luck in your investing.

      • Thanks all for you helpful comments.

        Ian

    • rising sales, expanding product line, rising costs of cheese, and active hedging of raw materials....seems like July was a fluke, and the 35% drop in price is overdone due to small float....interesting to think what would have happened in it were a blowout qtr...

 
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