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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (44160)	8/31/2011 11:44:02 AM
From: E_K_S	Read Replies (3) of 78639

Have you run across any value added food processors/distributors not in the retail sector? I am looking for something that may process either generic or banded products but also have niche distribution markets. Anything international would also be a plus. As I investigate the AG food process chain (from farm to retail), I think there is opportunity for more consolidation in this sector as evidenced by the recent ConAgra Foods $4.9 Billion proposed Acquisition of Ralcorp Holdings. Cargall has been the one that seems to be buying many of these value added processors but they are privately held. The only companies I have been able to come up with are ADM and CAG. Maybe Nestle may be eying some of these acquisitions. Nestle May Aim to Rebuild in Chinese Baby Food With Pfizer Unit By Dermot Doherty - Aug 8, 2011 3:00 PM PT bloomberg.com From the article:"...Nestle has made 19 acquisitions since the end of 2009, according to Bloomberg data. The company has said it plans to use its cash of more than 16 billion Swiss francs ($21 billion) to invest in existing businesses and make “bolt-on” acquisitions....". ---------------------------------------------------------------------------------------------------------- The valuation on Nestle looks reasonable with a trailing PE of 4 and forward PE of 13. An excellent debt profile of 2:1 where total LT debt is only twice annual net income. According to the article they have $21B in cash to deploy for acquisitions. Although the company is not at a screaming BUY level but still below it's 200 day MA, I will start a tracking position and throw it in my AG basket. EKS

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