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Fresh Del Monte Produce Inc. Message Board

  • value_tracker value_tracker May 4, 2006 4:14 PM Flag

    Purchased More Shares Today

    I believe that management's removal of the dividend is prudent, and frees up cash flow to be used on stock buybacks.

    Personally, I think that if the business falls into the $13-14 range, then there will be multiple offers to take the company private for approximately $19-20.

    I'll be a buyer all the way down, increasing my purchases as the price continues to fall, if it does.

    - Value Tracker

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    • Actually, I agree with you. But not yet. Tonight, some people will hear the dividend news for the first time. Tommorow, some more will read it. There will be more sellers.

      Any big boys still in, will need to get out.

    • VT-
      As did I. Such incredible volume has changed hands - granted alot is in and out money and short covering - that a very large stake could have been accumulated in no time at all. I wouldn't be surprised to see a noteworthy 13D filing hit the wires in the next couple of months.

      The stock has gone off the fundamental rails and is now trading based on the management team having lost all credibility. Fortunately, that is a problem that can be fixed.

      And the $20/share offer better not come from the IAT Group or I will be the first one on the phone to Bill Lerach, the undisputed king of shareholder lawsuits.

      • 1 Reply to pdnnyc
      • This is pretty much the same management team that averaged over 17% return on equity over the course of 8 years through 2004. (with the last couple over 20%).

        It isn't like they have forgotton how to make money in the industry. Neither has the industry fundamentally changed in the last couple of years (except for skyrocketing fuel prices).

        Competitors also have to figure out how to be profitable with high energy costs. My sense is that these guys will figure it out first and best.

        I would sell shares of any company if I thought management was trying to dupe shareholders. My opinion is that this company doesn't have a history of doing that. During the 8 year period I mentioned, tangible book value per share more than doubled. Not a runaway growth story at 10% per year but very respectable in this competetive industry. Above average hurricane impacts and fuel costs made 2005 a year to forget.

        I believe the management team intends to and will get this company back on track (though energy costs will be a drag).

        The one important factor I have a hard time assessing is tariffs, quotas, etc. I would appreciate forward-looking comments about these from those with expertise.

        Respectfully,
        PL_WB

 
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