Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Spekulatius who wrote (72379)	2/20/2023 1:06:45 PM
From: Elroy	1 Recommendation Recommended By Spekulatius Respond to of 78745

BGS simply pays dividends in excess of their GAAP earnings, that’s why the dividend is partly a return of capital. Is it this simple? Would dividends from any company with negative GAAP earnings for the calendar year be non-taxable ROC income? BGS - why it's attractive. Well, lets see. Selling food seems like a good segment. Yup, I guess that's all I got, but that's not bad! They have recently cut their dividend from about $1.45 per year to $0.78 cents per year. I think they plan to use the cash to somewhat delever. For an investment story, the inflation thing really mucked them up beginning about Q2 2022. They're trying to increase prices and it takes time for those price changes to ripple through the income statement. I think the current quarter and Q1 2023 are supposed to show the affect of their price increases, perhaps stabilizing the business. At a minimum I think the Q4 2022 and Q1 2023 results should show improvement over last Fall, and maybe the shares respond well to that. My thoughts are the share price was $28-$32 before inflation messed them up, if they can just sorta stabilize back sorta close to where it was a year ago, maybe the share price bounces up to $20-$25? I'll give them a year to adjust to the inflation problem, and if the share price bounces up to my target price, sell, if it doesn't happen, sell. I was hoping to collect $1.45 while waiting for them to stabilize the business, but that became $0.78. Oh well. If it gets to $10 before they report their Q4 2022 I was going to buy more. It got close, but no basement price cigar yet. It's not a favorite pick of mine, that's for sure.