Overall Score: 1
Chart: 1
Analyst Opinion: -1
| Strong Buy | 1 | |
| Buy | 0 | |
| Hold | 4 | |
| Underperform | 1 | |
| Strong Sell | 0 | |
Insiders: 1
CEO Amir Abu-Ghazela buys 100,000 shares at 22.59 between 3-1-12 and 3-6-12.
Management Discussion and Analysis: 0
Government and Regulation Risk
Natural Disaster Risk
Sales rose slightly largely due to higher prices, partially offset by lower volumes
Gross margins improved slightly because of higher sale prices, partially offset by higher fuel costs
Higher SG&A expenses due mainly to increased selling and mkting expenses in South Europe
Fuel costs rose 37% ($38.6mm), container board dropped 8%, charter rates stable
48% from Company owned farms, 35% from Costa Rica
Bananas are 46% of sales
#3 in Banana, #1 in Pineapples, fragmented mkt share elsewhere
Walmart 12% of sales, top 10 is 32% of sales
Low barriers to entry, distribution and logistics network is competitive advantage
EU has tariffs on Banana import till 2020, might change structure
No material environmental proceedings
Seasonality, 1Q highest margins, 2Q highest revenues
Good labor relations
Currency exposure is hedged
Southern Europe dist and marketing is new and untested
Abu Ghazaleh family owns 34% of shares
$300mm credit facility maturing in 2013 (downsized from $500mm), MGT happy with liquidity
$590mm tax loss carry forwards
No PENSION or OPEB risk
Multiple lawsuits / antitrust pending ($30mm+)
EPA cleanup costs ~$20mm over 10 years
Stock performance relative to Market: -1
Sector Outlook: -1
High commodity prices, minimal pricing controls point towards compressing margins, negative economic outlook for consumer
Cash Flow: 0
Cash flow is relatively stable, working capital has been a source of cash in the past 3 years
| 2009 | 2010 | 2011 | ||
| Revenues | $3,496.4 | $3,552.9 | $3,589.7 | |
| COGS | 3,185.6 | 3,280.5 | 3,270.2 | |
| Gross Profit | 310.8 | 272.4 | 319.5 | |
| SG&A | 165.8 | 166.8 | 190.4 | |
| EBIT | 145.0 | 105.6 | 129.1 | |
| D&A | 83.7 | 78.7 | 73.5 | |
| EBITDA | 228.7 | 184.3 | 202.6 | |
| Capex | (84.5) | (70.8) | (79.4) | |
| Interest | (11.9) | (10.8) | (6.8) | |
| Working Capital | 27.5 | 22.3 | 10.2 | |
| Taxes | (18.1) | (3.3) | (11.2) | |
| FCF | 141.7 | 121.7 | 115.4 | |
| CFO | 257.5 | 197.4 | 195.7 | |
| CFI | (66.9) | (50.6) | (74.7) | |
| CFF | (182.2) | (136.7) | (125.7) | |
| Net Income | 144.6 | 60.8 | 94.8 | |
PEG Ratio: 1
| P/E | 14.25 | |||
| 2011 | 2012 | |||
| EPS | 1.56 | 1.93 | 23.7% | |
| PEG Ratio | 0.60x |
Valuation: 1
Value Pro shows a 65% upside from the current price of $22.27
Following changes were made to Value Pro’s assumptions:
Adjusted FCF for 7 yrs from 10 yrs
Adjusted growth rate to 1.5%
10 yr treasury at 3%
Company interest rate is 1.75%
Equity risk premium assumed at 5%
Beta is taken from finance.yahoo
Catalyst: 0
Commodity price stabilization, Consumer confidence and disposable income needs to improve