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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (19880)	10/16/2004 3:51:48 PM
From: E_K_S	Read Replies (1) \| Respond to of 78663

Hi Paul - One pure play for chicken is a small producer in Georgia called Cagle's (CGLA AMEX listing). Cagle's, Inc. along with its wholly owned subsidiary, Cagle's Farms, Inc., produce, market and distribute fresh and frozen poultry products. The operations of the Company consist of breeding, hatching and growing of chickens; feed milling; processing; further processing, and marketing. When feed prices were low, Cagle's always had a good and profitable quarter. (http://finance.yahoo.com/q?s=CGLa) With overall chicken prices so low, I do not know how they can continue to remain profitable. I also, like your idea on GMK who is a dominant tortilla maker but can you think of any company that is a pure play in this space? I recently read that tortilla consumption now exceeds that of white bread. GMK has paid a dividend in the past but Yahoo does not show any recent dividend activity. I sold 2/3 of my ABS holdings but like the stock below $20. They have a hidden jewel in their undervalued real estate holdings which eventually will give them a competitive advantage against their competitors. They bought Bristol Farms last month which is a high end "gourmet" food provider located in Southern California. They plan on rolling out this specialized store concept into their exclusive geographical markets (a store w/i a store perhaps) to compete with the likes of Whole Foods. The CEO has a lot on his plate and I do not see a turnaround in sustained growing earnings until late next year. Here is an excellent article on companies that have significant real estate holdings. (http://www.buildings.com/Articles/detail.asp?ArticleID=1525) Notice that JCP already divested their drug division and Sears has almost tripled from their lows last year at $19. Both of these companies had significant real estate holdings that they acquired 20 years or more ago. The company real estate acquisition "land" costs are carried on the books at "cost" not "market" value. ABS is the only company on this list that has not had any significant price move. I estimate that ABS may have at least $1 million per store in unrealized "land" real estate gains for their stores 20 years or older. I think on my last review of their properties, over 50% of their stores fell into this category. These unrealized gains could represent as much as $5-$8 per share. The CEO could unlock these gains by creating a separate division that acts as an REIT or leasing agent to their other subsidiaries. This may be his long term plan but as of yet it is unannounced. He has however, begun to create separate profit centers with each of their separate store within a store centers (Bristol Meyers, Sav-On, Shaws etc). ABS is an excellent value play as "work in progress". I will be loading up next year at prices below $20. EKS