Meat Products

Hormel Foods Corporation
Over the course of the last two years, the company has spent $800m on acquisitions. These management moves have served to decrease y-o-y revenues by 4% and net income after taxes by 3%. On a more positive note, y-o-y dividends did increase by 17%. Personally I think dividends increased in the hopes that investors would fail to notice that -y-o-y goodwill increased by 16%, intangibles increased by 14%, and free cash flow fell by almost 2.5%. Maybe investors should start thinking about a management change here, bring someone in that can actually run the show, instead of just overpaying for acquisitions and hoping they work out.

Hormel Foods Corporation (NYSE: HRL) – FYE 10/2017 – SELL HALF – The stock is trading at levels above my current $23 fair value estimate, but below my $37 close target – Please See Linked Worksheet

Pilgrim’s Pride Corporation (NYSE: PPC) – FYE 12/2017 FARILY VALUED The stock is currently trading at levels in line with my most recent $41 fair value estimate. Please See Linked Worksheet

Sanderson Farms, Inc.
You know it’s one helluva note when all you want to do is be in the chicken business, that you have to continually defend yourself in the courthouse. During 2016 and 2017, the company has become a party to numerous lawsuits, alleging all manner of price fixing and to conspiring to keep payouts farmers at low levels. My point is, pay attention. Lawsuits have a funny way of costing everyone but the lawyers lots of money. On a more positive note, y-o-y earnings grew at a 48% annual clip, y-o-y free cash flow grew at a 187% annual clip, while sales increased 19%. To add to these great financial numbers, the company’s long-term debt remained at $0 for the second consecutive year. This is probably going to change for FY 2018 as the company moves forward with new facilities in Texas.

Sanderson Farms, Inc. (Nasdaq: SAFM) – FYE 10/2017 – FAIRLY VALUED – The stock is trading at levels in line with my current $207 fair value estimate – Please See Linked Worksheet

Seaboard Corporation (NYSE: SEB) – FYE 12/2016

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.