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Omega Protein Corporation Message Board

  • thersanewsherriff thersanewsherriff Mar 13, 2009 9:23 AM Flag

    Fundamentals

    second request -

    does anyone on this board know anything about the "Fundamentals" of OME? again, not looking for drivel about the mgt or stock price - i'm talking about the "Functioning of the Company". The stock market will often over price and occassionally underprice securities. But to know the deviation, one must know the fundamentals.

    i know the fishmeal business quite well 10+ years in it.

    so again i ask, is anyone on this board able to comment about OME operations -- is there a bad apple somewhere? or a cancer within? is there anything which will prevent the company from producing the same amount of Fishmeal/Fishoil in 2009 and 2010 ? Is "Oil" the number one cost of the company? if Yes, will crude oil at $48 but fishmeal at $1,000 produce 2x returns for OME? how are their fishoil/omega3s coming along? these are the fundamentals that will drive the future of the company ---

    everyone already knows that top mgt is going to "Cash In" for themselves, unfortunatley that is true for 90% of all public companies, so its a cost of investing - i'm trying to look beyond mgt and see if their is a business basis for why the profits of the company will increase -- if they show any gains at all, the stock will rebound even further.





    if not, this company seams absurdly undervalued.

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    • From today's Mississippi Sun Herald daily.


      March 13 LETTERS TO THE EDITOR

      LACK OF LIMITS ON MENHADEN AND BYCATCH DEFIES COMMON SENSE

      I read with interest the March 5 letter by Jim Martin of Biloxi concerning the decline of our fish stocks (“Menhaden, mullet, razor clams … where are they now?”). As one who has fished in Mississippi salt waters for over 40 years, I wholeheartedly agree. The number of game fish, mullet and sharks currently caught in state waters is no comparison to what we caught growing up on the Coast.

      Yet, we hear from the so-called fisheries experts with the Department of Marine Resources that everything is fine, and it’s OK for the menhaden industry to catch millions and millions of pounds of pogy (no one really knows the true amount for Mississippi) without limit, along with an allowed 5 percent bycatch of mullet, croaker, white trout, speckled trout, redfish, drum, snapper and God knows what else. Something is wrong with this picture.

      If I have limits on the amount and type of fish I’m allowed to catch, then why are there no limits on an industry that is responsible for wiping out millions of pounds of edible fish each year along with their prime food source, the menhaden?

      I urge the Commission on Marine Resources to start worrying more about the people of the Gulf Coast and less about their friends in the menhaden industry.

      GREG A.

      Gulfport

      • 1 Reply to therealsportfish
      • The heading is Cancer.

        As far as the post, The Mississippi Sun Herald daily, is not a source I would consider to be specifically significant, not that I have any knowledge to support my statement, as it is very local publication in scope and who knows about the bias nature of the editors and such.

        In any case, any business in any industry is confronted with these types of occurances throughout their daily existence. There are tree huggers everywhere in our world today. So, this is really very meaningless. What is always important is what lobbying body is funding the politicians to have things run a certain way. Always must grease the wheel.

    • Sorry, I don't know anything about specific operations at OME. I do not believe any cancers exist. Income statement and balance sheet have looked good over the past several years with the biggest change being that when they bought out an existing shareholder (Zapata) and issued some debt to do so. This was accretive to earnings right away. The only fluctuations have been in the stock price. They are making money now as compared to several years ago and yet the stock price is at the same levels, even a bit lower at times. Sorry if I am not offering anything new to you here.

      I have not known anyone that has the knowledge to add concerning specific operations so anything that you can add is appreciated in advance. What kind of cancers could be there in your opinion?

      • 2 Replies to ponze69
      • ponze - could you summarize for me:

        when they bought out Zapata, did they "retire the shares" ? thus making it accetive?

        how much debt was issued to buy out the shares?

      • hi Ponze - thats just it, for me i don't see any "cancers" inside of OME - but i'm not on the inside, nor am i close enough to their operations to have any ideas if any exist.

        They appear to be managing the debt - they have $35MM gross profits, $40MM in EBITDA and $13MM in operating cash flow. so from an "inside" OME, as long as those numbers are real and not incumbered by any hidden financial issues....the company looks dirt cheap on a forward looking basis. (and i mean next quarter and next year, not 5 years out -- as i think lots of companies look cheap 5 years out.


        world demand for fishmeal is NOT declining - in fact, if China had not suffered the "Blue Ear" issue in its swine market, fishmeal probably would not have dropped below $1,000 -- if they choose to hedge their Fuel costs at the current prices, say lock in $45 crude oil) it might be a very smart move.

 
OME
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