[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

SFD Report, 10/00



Report on Smithfield Foods, Inc. (NYSE: SFD)
As of October 28, 2000
Sean G. Thomas
 
Last Trade: $28 1/8
Shares Owned: 76
Market Price: $2,137.50
Cost Basis: $2,012.50
Total Gain: $125.00
Percent Gain: 6.21%
 
Broker Recommendations:
Strong Buy:      3
Moderate Buy:  2
Hold:                2
 
Haven’t reported on this one in quite some time, but it’s certainly improved since then.  Earnings for the first quarter of fiscal 2001 were announced August 22, and beat the Street’s projections: SFD earned $44.6 million, or 81 cents a share, up from $6.9 million, or 15 cents, a year earlier. That exceeded First Call’s 77-cent consensus estimate. Revenue rose to $1.4 billion from $1.1 billion, reflecting a 24 percent increase in unit selling prices. Strength in the company's hog production segment offset a "modest" loss in Smithfield's meat-processing group, the company said. But with hog prices falling, profit margins in the processing business have "improved substantially," according to CEO Joseph W. Luter III.
 
More recently, there’s been speculation in recent weeks whether Smithfield would bid to purchase meat-processing firm IBP Inc.: a subsidiary of Donaldson, Lufkin & Jenrette has made a  $22.25-a-share buyout offer for IBP, angering many of IBP’s shareholders who feel several dollars a share below fair value for the company. Smithfield spokespeople have publicly agreed with those shareholders, but remain mum about the prospect of a competing bid.
 
Message boards have been pretty quiet: some investors seem to think that hi-tech volatility could benefit the food sector, but most are just holding onto what they’ve got and waiting to see what happens.