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

To: Paul Senior who wrote (58011)

9/16/2016 11:14:00 AM

From: Lazarus

Read Replies (1) | Respond to of 78751

Paul, judging from the chart for SENEA the downside risk looks minimal .

This also is favorable:

Stockholders' Equity

During the three-month period ended July 2, 2016, the Company repurchased 14,400 shares or $458,000 of its Class A Common Stock as Treasury Stock. As of July 2, 2016, there are 2,295,950 shares or $66,167,000 of repurchased stock. These shares are not considered outstanding.

The math is simple 458,000 / 14.400 = $31.80

I'm more of penny stock guy but this company has the kind of metrics I look for in a penny stock. I joined you today for a few.

To: Paul Senior who wrote (58011)	9/16/2016 11:36:56 AM
From: E_K_S	Read Replies (4) \| Respond to of 78751

Re: SENA Still researching the business. What's different now is that there is general food deflation. Many of the commodity prices are at/near multi-year lows and even fertilizers (one of the main inputs for farmers) is at/near a bottom of the typical 9 year cycle. As you stated SENA serves an important function in the channel to process and deliver vegetables/fruits to the wholesale/retailer buyers. My concern is they have little to no pricing power while at the same time have the same cost structure along w/ very thin margins. They do own some undervalued fixed assets which have value and probably reduce any significant downside from the current levels. So risk/reward looks attractive. I still need to research if there are any disruptive things SENA may/could do in their processing, inventory, and distribution infrastructure. I am thinking the use of more automated process controls, robots, distribution/delivery efficiencies. So one of the things I plan to look into is if Amazon and/or other JV partners are working w/ SENA for next generation processing. If Amazon is exploring the development of their own private label for vegetables/fruit then a SENCA JV makes a lot of sense. Amazon Begins Selling Perishable Private-Label Foods Imagine if Amazon tweaked SENCA's processing w/ next generation robots and real time order fulfillment to-the-home deliveries direct from the warehouse. Amazon could get these assets on the cheap and/or a JV private label deal would result in much higher margins. If any of this occurred I would be buyer and build a 2% portfolio position. EKS

To: Paul Senior who wrote (58011)	9/16/2016 7:17:33 PM
From: staring	Read Replies (1) \| Respond to of 78751

Normalizing the PE to the last 10 years Earnings, the PE I get is near 9. Assuming the historical ROE and a cost of capital of 12% and a modest growth of 1% (since the company cost of capital is higher it ROE, growth destroys value), the justifiable Price to book I get is 0.7, which is roughly that the company currently has. Therefore, for me SENEA is appears to be fairly priced (unless operating performance improves in the future..). Another thing that puzzles me is that in 10 years, there were barely any cash distributed to shareholders in the last 10 years (regardless of its form)...