Fresh Del Monte: Is This Fruit Stock Getting Soft?

| About: Fresh Del (FDP)

With any equity, there are generally five large groups of stakeholders - insiders, institutions, option traders, short sellers, analysts and individual investors. While it is hard to track trends among individual investors, we can track the moves and sentiment of the other five stakeholders. Using this as a framework, let's take a look at a household name - Fresh Del Monte (NYSE:FDP)

Fresh Del Monte engages in producing, sourcing, transporting, and marketing fresh and fresh-cut produce worldwide. It also offers prepared fruit and vegetables, juices, beverages, snacks, poultry, and meat products. The company is also involved in ocean freight business; and the manufacture of plastic and box products, including bins, trays, bags, and boxes. It offers fresh produce primarily under the DEL MONTE brand along with the UTC, Rosy, Fruit Express, Just Juice, and Fruitini brands

Fresh Del Monte's main competitors are Dole Food Company (DOLE) (see my previous review) and Chiquita Brands (CQB) (also see my previously reviewed on CQB).

So, how are each of the main stakeholders moving on Fresh Del Monte?

Insiders - Neutral

Insiders currently hold 21 million shares of the total 58 million shares, 36% of the outstanding shares. Their stock activity has been a slight net negative over both the last 3 months and last 12 months. The sales total less than 100,000 shares of their 21 million, so there is nothing really to read from this activity.

Institutions - Neutral

There are 137 institutional holders controlling 37.4 million shares, or 64% of the float. The institutions have net reduced positions by 200,000 shares, or roughly 0.5% of their ownership and less than half a percent of the total shares. The net activity was:

  1. 18 opened new positions
  2. 66 increased
  3. 52 reduced
  4. 10 sold out
  5. 19 no change

This activity is a generally neutral activity level.

Short Sellers - Neutral

Open short interest was 1.2 million shares as of November 30th, or 2% of the shares. This is down about 25% over the last year but up over the last 60 days. This trend shows the bears were weaker two months ago and have less conviction than a year ago. These changes are not strong enough to signal a trend either way, so we'll call this one neutral.

Options - Neutral

Scanning the open contracts, we can generally get a feel for which way the options traders are voting on this stock. It turns out that for FDP, the option market is so extremely thin that there is really nothing to study here. The largest open positions are 147 contracts of $25 March calls. So I think we need to call this one neutral.

Analysts - Bullish

Fresh Del Month has only a handful of analysts covering it, so measuring trends is a bit more subjective than objective. Three months ago, there were 1 strong buy, 4 holds and 1 underperform. The most recent reporting has 2 analysts at a strong buy, 2 at hold and 1 underperform. This is a slightly bullish trend.

Price Target

FDP's 52 week trading range is $21.80 - $26.85 and is currently trading at 52 week highs. FDP pays a 1.5% dividend (and a healthy 17% payout ratio). Analysts have an average $27.75 price target, or only a 4% upside potential from recent trading.


Summarizing, the top five stakeholders are positioning this way:

  1. Insiders - Neutral
  2. Institutions - Neutral
  3. Shorts - Neutral
  4. Options - Neutral
  5. Analysts - Bullish

Part the dullness of this stock is that the shares are almost entirely largely locked up by insiders and institutions leaving almost nothing for the rest of us to work with. The average daily volume is only 150,000 shares which could make the bid-ask spreads wider, making it hard to get your targeted buy and sell price. Based on all this, FDP is interesting to know about but not for an investment.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is only my opinion based on personal research and offered for informational purposes. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any equity, do your own research and reach your own conclusion. Investing includes risks, including loss of principal.