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Strategies & Market Trends : Value Investing

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To: Lazarus who wrote (60890)	6/14/2018 2:06:41 PM
From: E_K_S	Read Replies (2) of 78751

Re: SENEA You can not chase this as it is very thinly traded. I try to Buy in the $26 area and on very little volume it will easily trade to the $29-$30. Company has a high BV at $44.78/share per Yahoo but SENEA has had a hard time generating consistent positive EPS. The company has closed some packing plants and I see has bought other divisions/units Seneca Foods completes the acquisition of Burnette Foods maraschino cherry business Based on the GN valuation model and their large BV, they are fairly priced at $28.00/share based on $0.78/share annual earnings. In 2017 they earned $1.27/shae and the GN valuation model would price this at a fair value of $35.00/share. On plant closure and one time acquisition cost, there were significant one time write downs, so it is difficult to see what future EPS may be and if they will be growing. Sales are actually high and growing so maybe it's just in the operating part of the operation and getting their costs under control (no more future one time losses). If they can extend their EPS to say $1.65/share for the year (or $0.41/qtr), stock is worth $42.00/share. I like the recent management moves and it shows to me that they are working to stabilize their EPS. In the table above (this is from MorningStar) notice how EPS has varied over the last several years. The question of fair valuation is, can long term EPS average $1.65/share per year over next several year. If so, stock is 45% undervalued. FYI, I have owned this off and on over the last 3 years since Paul started watching it. I gave up on it last year when EPS dropped off a cliff. Good Investing EKS

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