45,000% Profit at Seaboard

Mar. 1.11 | About: Seaboard Corporation (SEB)

One of the lessons I try to teach investors is that there are good stocks to buy everywhere; don’t just confine yourself to the popular names like Apple (NASDAQ:AAPL) or Google (NASDAQ:GOOG).

One of the off-beat companies I like to follow is Kansas-based Seaboard Corp. (NYSEMKT:SEB). I’m not recommending it but I want to show you how a stock that almost no one knows about has been an outstanding performer over the years.

For starters, the stock closed yesterday at $2,320, so that high price will scare folks away. My opinion is that the fewer people know about my stocks, the better. Secondly, there’s zero analyst coverage on Wall Street, despite its having a market cap of $2.8 billion. Seaboard’s daily volume is often a few hundred shares. Every so often the volume will exceed 3,000 shares a day. That’s a heavy day for Seaboard.

So what does Seaboard do? Here’s the description from Hoovers:

With pork and turkey from the U.S., flour from Haiti, and sugar from Argentina, Seaboard has a lot on its plate. The diversified agribusiness and transportation firm has operations in some 40 countries in the Americas, the Caribbean, and Africa. Seaboard sells its pork and poultry in the U.S. and abroad. Overseas it trades grain (wheat, soya), operates power plants and feed and flour mills, and grows and refines sugar cane. Seaboard owns a shipping service for containerized cargo between the U.S., the Caribbean, and South America; it has shipping terminals in Miami and Houston and a fleet of 40 vessels (12 owned, others chartered) and ships to ports worldwide. Seaboard is run by descendants of founder Otto Bresky.

See? It’s terribly exciting. Too many investors think a great investment has to be one that discovers the twelfth dimension or cures the Bubonic Plague. That’s just not so. You should be focused on how well the companies operate, instead of what they do.

In April 2007, SEB got as high as $2,699 and by March 2009, it was at $785 -- that’s a stunning 71% decline. But Seaboard has rallied strongly and it’s not too far from making a new all-time high.

In 1980, the stock was going for just $17, and back in the mid-1970s it went as low as $5-1/8. That’s a nice 45,000% profit.

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