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Imperial Sugar Co. Message Board

  • opportunistx opportunistx Nov 4, 2011 11:38 PM Flag

    Undervalued Assets, Negative Catalyst have passed, Time to Buy

    I've done some intense research in the sugar processing industry. While the industry experienced modest growth during the five years to 2011 due to a rise in sugar consumption, domestic demand will taper off over the next five years. Increasing import competition will cut into demand, and downstream demand will fall as consumers opt for no-calorie sweeteners. To support future revenue growth, sugar processors will rely on alternative energy opportunities.

    Imperial sugar has one asset left that can be quickly monetized to raise cash. Let's not forget that this companies debt levels are very minimal. They just need to raise cash until the economics of the sugar processing business improve. What we have here is a liquidity problem, NOT an insolvency problem. However, assets are so undervalued here that even in a fire sale chapter 11 liquidation, common shareholders would recover the full value of there shares if they were to purchase around these levels. The downside risk from here is minimal. Share prices are not at 10 year lows. Now is the time to buy. Buy your shares with all cash, no margin leverage. I've purchased my shares through my broker at these levels in paper certificate form. Put your shares up or in a safety deposit box and forget about them. Wait 3-5 years and I'm sure you will easily double if not triple your money.

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