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The shares have been decimated. The culprit has been high grain prices and the company's inability to raise prices enough to offset them. The stock price is close to trading at 18 year lows and is down more than 50% from its 52 week high. The entire meat sector is getting hammered in sympathy to Pilgrim Pride's admission that they will report a very poor quarter and could be in non-compliance with its loan covenants.

All is not lost. Conventional wisdom says to buy when there is blood in the streets, and I can't think of a time when the outlook is so dire , making this an opportune time to go shopping for the bargain of the century. Grain prices will eventually fall (they have already started falling) and the reduction of  industry meat producing capacity will make it easier for TSN to eventually raise prices to the consumer.

Meat titan: TSN is the largest meat producer in the world. It operates 9 pork production facilities, 14 beef plants and 98 chicken plants. It also runs 24 prepared foods processing plants  and 67 distribution and cold storage facilities. The company operates 64 broiler hatcheries, 785 breeder houses and 1231 Broiler farms. TSN owns the majority of the real estate within it operations, with the exception of 60% of  its breeder houses and  Broiler Farm locations. The company produces 46 million head of chicken, 222,000 head of beef, 444,000 head of pork and 59 million pounds of prepared foods each week. The meat giant has ample room for expansion, currently producing at an  average 82% capacity.

Analyst estimates: The company is expected to generate 2008 revenues of $27.2 billion and earnings of .34 cents. TSN's   2009 earnings are expected to leap more than 200% to $1.06 on revenues of $28.6 billion. Wachovia and BB&T Capital have each recently offered  positive outlooks, and a median $19 price target. Fitch raised its opinion on TSN's debt from BB to BBB based on its success   of amending its $1 billion credit agreement to provide additional guarantees.

The balance sheet: The company is selling at a about a 10% discount to its book value of $13.50. It has significant debt of $3 billion, however, the company has taken fresh steps to shore up its balance sheet and improve liquidity. TSN recently completed a secondary offering that raised $255 million through the sale of 20 million shares at $12.75 per share. The company also received proceeds of $450 million through a convertible debt offering in conjunction with its stock offering.. Its annual cash dividend of 16 cents currently yields 1.2%.

Recent developments: The company  purchased the poultry operations of three Brazilian companies in order to obtain a foothold in that important region. Besides its numerous foreign operations, TSN  just entered into its third Chinese joint venture.

Heavy insider buying: Don Tyson owns 70 million shares of the class "B" shares and just purchased 4.6 million of the 20 million class "A" shares. He is an insider that has no problem putting his money where his mouth is.

Recommended action: Follow the smart money. Don Tyson is a buyer and he has more intimate knowledge of the company and its prospects than just about anyone else. If he is a buyer, then it might be a good idea to replicate his actions. The shares have been beaten down beyond reason, and in my book, the absolute best time to buy.

Disclosure: Long