Mark Krieger

Food Stocks Deserve to Be on Your Plate

Damn..sorry about that..I thought the SA editors would of caught that error. best....mark

Bridgford Foods: A Diamond in the Rough

Thanks for the feedback and good analysis. what you say has validity and I certainly appreciate it.I respectively disagree about your thought that management would rather vote themselves a pay raise versus paying a cash dividend--they own so many shares, it would be much much more lucrative for them to share the profits via a dividend than to get a pay hike!!


On Jun 02 10:04 AM y2kurtus wrote:

> Mark you've been sweet on this company and it's management for a
> while now. I don't blame you... I own a few shares myself so obviously
> I like the stock. I think the book value understates the value of
> the real estate BRID holds.
>
> I'll say this about management though, why would they pay a dividend
> to all shareholders (including the 20% of shareholders who aren't
> in the family) when they could instead chose just to vote themselves
> salary increases?
>
> Also from an even more cycinal view point, are you sure that the
> oldest generation of Bridgfords want the price of the stock to rise
> sharply in the short-term? I'm not... a low price allows them to
> sell or gift a larger number of shares to the younger generations
> of sausage makers. If your an old salt who just likes to see the
> company stay indipendend and your grandkids have total control over
> their employment outlook than better to let the price languish somewhat
> and just hord the cash within the company untaxed rather than pay
> a dividend which would be taxed at 15%.
>
> All the while the eldest family members can pass on $12,000 worth
> of depressed stock at say $6 rather than $10
>
> Anyway it's good to see the stock on the rebound but I don't think
> we will get rich of this one until the buyout comes!
>
> y2kurtus

Bridgford Foods: A Diamond in the Rough

One point I forgot to make. BRID's cash dividend could be about 27 cents a year when it is finally resumed, representing about one third of its annual earnings (allowing coverage to be adequate) This computes to a respectable yield of 4.2%. This could happen by the end of the year.There is a huge amount of incentive to get this dividend payout started again, because management/Board owns such a large stake of the company ( about 80%), they would essentially be paying themselves.

Basic Food Fund: Fat and Happy for Now

Roger: way to think outside the box,, BRAVO!!!!!!!!!!!!!!!

Bridgford Foods Shares Continue to Skyrocket

Roger: Thanks, I appreciate that, and every little bit helps on the recommendations, especially with a stock which trades as few shares as this one,Mark


On Apr 13 04:59 AM Roger Knights wrote:

> Good call on this one, Mark. I recommended this stock to others as
> a result. (Didn't buy myself because it has no options available.)

Basic Food Fund: Food Stocks Devour Bears

I like it alot, although I'm surprised the share price has not acted more favorably... The company is doing the right thing and sooner rather than later Wall Street will catch on and reward the stock appropriately.

Basic Food Fund: Food Stocks Devour Bears

you are right, PBY , JBLU and SCS are not food stocks-i included them because they were a big part of my portfolio and I wanted to track them. About WFMI, It's a high priced food retailer and I expect many consumer's will drop down to lower priced retailers to help ease their finacial burdens brought on by the recession. MY point is simple: Beaten down defensive stock present less risk and higher reward potential than most other equities!!


On Mar 30 03:08 PM Alan Young wrote:

> Why are SCS, JBLU, and PBY in a food index? (Did you mean PBJ?)<br/>Other
> components are a really mixed bag. CAG is about even; but IPSU is
> down -50% YTD--never mind the one-day block sale. So what's your
> point? "You have to be a glutton for punishment" to buy all these
> names just because the sector seems safe.
> Ironically, WFMI --not on your list-- is outperforming all of them:
> +60% YTD.

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

according to the 10k: Shareholders equity or book value is $32,535,000/ 9491000 shares = $3.42 book value per share


On Mar 27 03:40 PM Mark Krieger wrote:

>
> Dude; Why bash the company? They put up great first quarter #'s in
> a dismal economy. Book value is closer to $4, not $2.58!! it's better
> that they spread their sales around than become too dependant on
> WMT anyways.
>
> On Mar 27 02:07 PM Mr. Monkey Bread wrote:

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

Dude; Why bash the company? They put up great first quarter #'s in a dismal economy. Book value is closer to $4, not $2.58!! it's better that they spread their sales around than become too dependant on WMT anyways.

On Mar 27 02:07 PM Mr. Monkey Bread wrote:

> I suggest that you spend some time on the 10K and recent 10Q.
>
> From the 10Q:
>
> <<Net sales increased by $204 (0.7%) to $31,523 in the first twelve
> weeks of the 2009 fiscal year compared to the same twelve-week period
> last year.>>
>
> <<Our new Shelf Stable Sandwich products contributed sales of $965
> in the first quarter of the 2009 fiscal year. Except for Shelf Stable
> Sandwiches, no new products are currently a significant source of
> revenue in the 2009 fiscal year to date.>>
>
> Which indicates that their legacy products (including Monkey Bread)
> declined $761,000 yoy. Refrigerated and snack food sales declined
> $850,000 in the Q yoy. Frozen food (including Shelf Stable Sandwiches)
> rose $666,0000 (sign of the devil X 1000). Back out those sandwiches
> and you have a legacy decline in that category of -$299,000 (including
> "Monky bread which was up a staggering 16%").
>
> Their cash flow statement indicates that they lowered inventory by
> 1/3 and stopped prepaying expenses. Those are one time gains. On
> the plus side they habitually over depreciate stuff. They are also
> trying to reduce route sales costs. Whether sales will decline with
> fewer route salesman visits remains to be seen. That's where the
> value the brand comes in.
>
> The WalMart situation is easy. From the Q: <<For the twelve weeks
> ended January 23, 2009 and January 25, 2008, Wal-Mart® accounted
> for 8.3% and 13.8%, respectively of consolidated revenues or 16.5%
> and 20.4% of consolidated accounts receivable.>> That's a serious
> issue!
>
> Unless you think they are cooking their books, decline in shareholder
> equity is serious. That's the stuff you're buying when you purchase
> a share. According to their report the company now has equity of
> $2.58 per share.
>
> As a going concern if they can replicate Q1 over the next three Quarters,
> they would have ROE of 25% and a PE of 6.6. Since there appear to
> be so many one-off items in Q1, I doubt that will be the case. I
> certainly didn't detect much enthusiasm from management at the meeting.
>
>
> BRID's results will track the economy. I'd worry about several things
> when thinking of investing in them. They don't have a premier brand
> name. They aren't the low cost producer. Their only monopoly appears
> to be in those sandwiches, which are too expensive to sell to anyone
> but the government. Management pays itself relatively low salaries.
> Will they stay low when profitability returns? How will they deal
> with inflation?
>
> Over the past 10 years their ROE has averaged well below 10%. Their
> PE is typically >>20. Sales, book value, price/sales, net income,
> and a host of metrics have declined during the decade.
>
> What's changed now?
>
> Where's the catalyst?
>
>

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

second quarter earnings note;Second quarter is historically the company's weakest in terms of revenue production. This time around could be different, as sales gains at both CVS and Dollar General could provide BRID with top line growth substantially above meager expectations. Stay tuned, as this turnaround story starts to hit full stride!



On Mar 27 10:08 AM Mark Krieger wrote:

> (1) there is no evidence they are losing WMT sales (2) Book value
> decrease is a joke-it is all associated with a tax loss writeoff
> (accounting entry only) it will have to be reveresed soon and then
> BRID's shareholder's will then increase 25% (3) their only gainer
> was not just shelf stable sandwiches-you forgot about Monky bread
> which was up a staggering 16%-BRID can not make enough of this and
> they will have to probably produce product in a third shift to help
> meet demand.About profit margins: they are not suffering but expanding
> as BRID's first quarter gross profit margin increased from 33% to
> 38% with the help of higher sales and lower input costs.

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

(1) there is no evidence they are losing WMT sales (2) Book value decrease is a joke-it is all associated with a tax loss writeoff (accounting entry only) it will have to be reveresed soon and then BRID's shareholder's will then increase 25% (3) their only gainer was not just shelf stable sandwiches-you forgot about Monky bread which was up a staggering 16%-BRID can not make enough of this and they will have to probably produce product in a third shift to help meet demand.About profit margins: they are not suffering but expanding as BRID's first quarter gross profit margin increased from 33% to 38% with the help of higher sales and lower input costs.


On Mar 27 09:29 AM Mr. Monkey Bread wrote:

> This annual meeting was a disappointment. In the past management
> would spend considerable time presenting their business model and
> describe the challenges of operating a small family-controlled operation
> in the age of big-box dominance. They saved $25,000 by not meeting
> at the nearby Crowne Plaza, but lost a lot by skipping the usual
> presentations from management. Currently Bridgford is in Branch Rickey
> mode: 'addition by subtraction'.
>
> Shareholder equity has dropped 25% year over year. Revenue is flat.
> 'Shelf stable' sandwiches were the only gainer for last quarter.
> They booked one order in Q1 and announced a second in Q2. That appears
> to be it for this year and perhaps a couple of years. No new products
> were announced.
>
> They are increasing Dollar General and CVS at the same time their
> WalMart exposure is declining a lot. Since one of their main variable
> costs is distribution, you have to wonder if profit margins will
> suffer.
>
> Commodity prices are flat, but they have little pricing power. With
> the on-going recession/depression, I doubt that they'll prosper.
> In the past they have been thought of as a take-over candidate because
> their real estate liquidation value was worth more than their enterprise
> value. These days, who knows?
>
> Although the BRID price/sales is attractive, I question the value
> of their brand. Although they seem to have a large share of the frozen
> dough market, when was the last time you heard an Applebee customer
> demand a Bridgford dinner roll? In fact the sit down restaurant market
> is declining at present, and commodity players like these guys are
> looking at a steep hill.
>
> The older Bridgfords seemed talented if stodgy. The younger ones,
> not really.
>
> Their business does well when the economy booms, commodity prices
> are down, and pork is cheap. None of those elements are in place
> now. I would expect the stock price to continue to track book value.
>
>
>
>

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

I have bought in at many different prices over the past five years, and I am still buying. My average price is probably close to the mid $5's, so I have a long way to go before the opportunity arises for this investment to be profitable (especially if you factor in the cost of financing the position through margin debt). The fact that mangement owns so many shares is positive for the stock price because it makes the float or trading supply so small, that any incremental buying will have a major impact on the stock price. There simply are no sellers, and when a buyer comes in, he has to pay prices at huge premiuims to the previous close. The other benefit of mangement owning so many shares is they have a vested interst to see the company prosper and the share price appreciate. it is their money, so they will guard it with the utmost attention and detail. The managment team will soon want to pay themselves more, and they will do this by resuming the payment of cash dividends ( the cash dividend was deleted about five years back). Hope that helps!


On Mar 26 07:06 PM Veneratio wrote:

> Hey Mark,
>
> Thanks for the review, I found it very insightful. If you don't mind
> me asking, what price did you buy in at? Looking at the average daily
> volume, I'm assuming the directors own a significant portion of the
> stock. Don't you feel this will restrict its future gains?
>
> I would appreciate your thoughts. Thanks, Mark
>
> - Ven

Bridgford Foods Annual Shareholders Meeting: Business Continues to Grow

Robert99: I see where you are coming from, however, Most of the remaining shareholders are friends, retirees and relative of the Bridgford family and they already own 81% of the shares. They have enough ownership and would feel bad for those they bought the stock from at $4 .when a year from now the shares are trading in double digits. They just don't want the perception that they 'took advantage" of others (especially friends-it's a tight knit organization)) for their own gain.


On Mar 26 08:14 PM robert99 wrote:

> I love microcaps, and I've been following your articles for a month
> or two, but this caught my attention:
>
> "The management seems to have no intention of taking the company
> private any time soon. Their rationale: they think the shares are
> so undervalued at this juncture, it would be unethical to purchase
> the shares back from the remaining shareholder base at prices so
> low."
>
> What? If I were in control of a prospering company with a bright
> future and an extremely undervalued stock price (all assumptions
> in my hypothetical scenario, of course), I'd be buying my stock back
> hand-over-fist, sellers be damned. If they put it up for sale, I
> would assume they REALLY wanted to sell it at that price, and I'd
> buy it. The quoted statement makes no sense.

Bridgford Foods: The Dough Finally Rises

Time to buy more. This one is in a certain recovery mode and this fact should be taken advantage of. I would not be surprised at all,if the stock hits $7 before years end.

Bridgford Foods: The Dough Finally Rises

Roger: You definetly hit the nail on the head on that one. As far as BRID was concerned, it could not of gotten any darker-infact it was "pitch black", now the light it is emmiting is as bright, as can be! what a difference a day makes!!!This one is going back to $6-7 and in a year or two could challenge its all time high of $24