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

To: waver99 who wrote (48821)	7/18/2012 1:00:15 PM
From: Paul Senior	2 Recommendations Respond to of 78717

Hello, waver99. Oops, I inadvertently erased my considered (presumably) reply. Here's a short redo For both companies, the question for me for a buy is: How long do I expect to be in these stocks? I'll pass on TSN. Too iffy for me. For SFD. For food companies -- big, established ones -- I like to see either growth in book value or a "decent" dividend, preferably both. And I don't want to pay more than 10x p/e. I don't get all that with SFD. SFD seems (to me) a little more consistent than TSN, and I can run my numbers on it a little more comfortably. I calculate for me, fair-value, my top buy-price, at stated bv ($21.50). With all the insider buying we see, clearly insiders believe or believed the stock to be undervalued at today's $18.29. I say the risk/reward favors a buy at current price, with a sell maybe at book value -- insider buys give me some confidence that it might actually get there again. So for me, question is, do I want to go for a 3 point gain, and how long would I be willing to hold this stock to see it? (And this assumes the stock won't fall further, and I thus won't have to make a decision if I want to add more, just hold on, or give up.) Iffy for me. I'll pass for now, and continue to look around for something with higher return possibilities and/or dividends while waiting. Just saying what I will do. You/others will make your decisions based on your views/analyses/requirements.. (Aside: I hold SEB, so I am already somewhat at risk with pork producers.)

To: waver99 who wrote (48821)

7/22/2012 5:09:22 PM

From: Spekulatius

Read Replies (1) | Respond to of 78717

Re SFD - this stock looks like a decent value to me. I checked in thwir latest 10-k and they hedge exposure to corn prices, product (hog)prices and energy cost.

Exerpt from 10-k means that they should show a ~50M$ gain for a 10% increase in feedstock prices. This looks like the impact of higher corn prices should be buffered.

Sensitivity Analysis
The following table presents the sensitivity of the fair value of our open derivative contracts to a hypothetical 10% change in market prices or in interest rates and foreign exchange rates, as of April 29, 2012 and May 1, 2011.



	April 29, 2012		May 1, 2011
	(in millions)
Grains	$	49.4	$	33.1
Livestock	18.0		85.4
Energy	3.3		0.3
Interest rates	—		—
Foreign currency