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Pilgrim's Pride Corporation Message Board

  • netlosstoo netlosstoo Jan 30, 2013 2:42 PM Flag

    Tyson call

    Could present a buying opportunity for SAFM and PPC if interested in accumulating more shares. I expect TSN to meet expectations … but if they don’t, think the beef segment will bring it down. USDA Live – Box beef spread was not favorable for TSN’s Q (expect about 1.5% margin v. managements 2.5% to 4% “normalized” range). So go straight to the chicken segment 1) see if they were profitable there 2) how profitable … I expect about 4.5% operating profit in TSN’s chicken segment.

    The accumulation buy:
    If TSN misses and the stock dips then PPC and SAFM may dip in sympathy. If the chicken segment did good and PPC can be got cheap, and you are looking for an accumulate (not trading) spot, it might be a good buy. Once management starts talking at 9 EST for conference call and 10 EST for annual meeting, TSN may rebound and PPC and SAFM along with it.

    Just a random thought. Long run (next two years) I am very bullish on the chicken producers, including TSN. TSN will have trouble with their beef margins as supply is so tight, and they may bid away their margins in the near future … but the closing of more plants could help that situation a bit.
    JMHO FWIW, which is free, and worth about doulbe that

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    • As expected TSN reported chicken segment profit. TSN’s margin was 3.6%, which I believe includes admin costs, but not interest exp. TSN highlighted improved contract pricings, some of which will not kick in until Q2…. Demand shift away from red meat, due to pricing and availability… expect improved chicken segment margins to “normalized” range in back half of year. Beef margins were low as expected, but pork segment margins were higher than I expected.

    • Flat line pattern with low volume always been good.... Chicken looking good

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