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  • Cal-Maine Foods: Good Times Continue, I Am Cautious Amidst Emerging Headwinds [View article]
    From Bloomberg March 31 2015


    U.S. corn supplies are even bigger than analysts expected, with prices tumbling the most since June on Tuesday after the government pegged reserves at a 28-year high.
    Domestic stockpiles at 7.745 billion bushels as of March 1 were 11 percent higher than a year earlier, the U.S. Department of Agriculture said. That’s the most for the date since 1987. Analysts predicted a gain of 8.6 percent, on average. Adding to the supply woes, farmers are set to plant more corn than forecast, the agency said in a separate report.
    Bigger global grain and oilseed supplies have helped drive world food costs to the lowest since 2010, with the Bloomberg Grains Subindex dropping 28 percent in the past year. A glut of corn, used in everything from animal feed to fuel, may signal lower costs for meat producers including Tyson Foods Inc. and for makers of sweeteners and ethanol such as Archer-Daniels-Midland Co.
    “The supply bear market is well intact on corn,” Don Roose, the president of U.S. Commodities in West Des Moines, Iowa, said in telephone interview. The stockpile number shows “you’ve got a bigger cushion for adverse weather than you thought,” he said.
    Corn futures for May delivery slumped 4.6 percent to close at $3.7625 a bushel on the Chicago Board of Trade on Tuesday, the biggest loss for a most-active contract since June 30. Aggregate trading more than doubled compared with the average in the past 100 days, according to data compiled by Bloomberg.
    Apr 6, 2015. 01:58 PM | 1 Like Like |Link to Comment
  • Cal-Maine Foods: Good Times Continue, I Am Cautious Amidst Emerging Headwinds [View article]
    Commodity and mkt yr 1/ Planted acreage (Million acres) Harvested for grain (Million acres) Production (Million bushels) Yield per harvested acre (Bushels per acre) Weighted-average farm price (dollars per bushel) 2/ Loan rate (dollars per bushel)
    Corn 2007/08 93.53 86.52 13,037.88 150.70 4.20 1.95
    2008/09 85.98 78.57 12,043.20 153.30 4.06 1.95
    2009/10 86.38 79.49 13,067.16 164.40 3.55 1.95
    2010/11 88.19 81.45 12,425.33 152.60 5.18 1.95
    2011/12 91.94 83.88 12,313.96 146.80 6.22 1.95
    2012/13 97.29 87.37 10,755.11 123.10 6.89 1.95
    2013/14 95.37 87.45 13,828.96 158.13 4.46 1.95
    2014/15 90.60 83.14 14,215.53 170.99 3.50-3.90 1.95
    Apr 2, 2015. 02:39 PM | Likes Like |Link to Comment
  • Cal-Maine Foods: Good Times Continue, I Am Cautious Amidst Emerging Headwinds [View article]
    You may want check the usda (3/31/2015) planting report USA and south america for both corn and soybean. 87 million acre planting down from 90 million. The $6 a bushel price a few years back looks like an anomaly, when you look at planting to harvest acreage over the past 30 years. Also YLD per acre is all time high with new technology. The $4 bushel range looks like more of an average. At $4-4.50 a bushel CALM should still make good margin. CALM margins are also improving based upon selling the higher end eggs. That is trend appears to be main focus of management. The other factor is CALM continues to produce more eggs then buying wholesale to meet their demand. They are expanding to meet demand with their eggs. This also should help margin in the near term. Calif. is not a big market for CALM, but the extra capacity that cannot be sold into CAL may be the bigger issue and risk drop in wholesale egg prices in the summer months. According to USDA, the size of cage has very little impact on chickens quality. This was a voter issue several years ago based upon feeling and not facts. I don't see the type of mandate spreading. If it did the price of eggs would go up more than cost and CALM would benefit, like the CAL producers are doing now. .With debt down and cash holding, I would assume CALM is looking at acquisitions if there is any weakness in industry. Based upon a discounted cash flow model using CAPM for Beta of .65 (regression based upon past 5 years Bloomberg) and EPS growth of 9% for 8 years with terminal growth of 3% thereafter (long term growth of industry) I get a fair price of 57 roughly. RISK are there, but EPS growth at 9% for growth phase is below what CALM has done in the past few years. Based upon sustain growth model (ROE x retention ratio ratio) CALM should be available to achieve this growth. I believe they have several acquisition targets based upon USDA report of small egg producers that exist, but they never seem to overpay. JUST my two cents from review the company.. I hold a position in stock. And YES in the low 30's based on today's facts i would buy a lot more. I am HOLDING here.
    Apr 2, 2015. 02:35 PM | 2 Likes Like |Link to Comment
  • Cal-Maine Foods: A Long Term Growth Play [View article]
    Just and added note: CALM could earn between $3.50 to 3.75 a share over the next 12 months . With their dividend policy: Effective November 30, 2007, the Company’s Board of Directors approved the adoption of a variable dividend policy to replace the Company’s fixed dividend policy. Commencing with the third quarter of fiscal 2008 Cal-Maine began to pay a dividend to shareholders of its Common Stock and Class A Common Stock on a quarterly basis for each quarter for which the Company reports net income computed in accordance with generally accepted accounting principles in an amount equal to one-third (1/3) of such quarterly income

    They could have a 3.50 x .33 =1.15 to 3.75 x .33=1.23. This is roughly a 3% yld. A lot will depend on FEED cost over the summer The next two quarters are the slowest. With the increase % of premium eggs, we may not see the historic drop over the summer months.
    Mar 30, 2015. 03:21 PM | Likes Like |Link to Comment
  • Cal-Maine Foods: A Long Term Growth Play [View article]
    Funny ...the head was line is CALM misses estimate by 5cents. THE MEAN estimate at that. They had a great qtr. Feed cost down and selling price up and MORE eggs being produced in house. The CALIF issue seems to be settling down and the market is absorbing the extra production.

    But the only thing the market saw was a 5 cent miss There was 3 analyst with estimates of 1.30 for high and .95 for the low. So DA mean was 1.10...It would appear the miss was a goofy mean and not a miss. The $1.30 was very optimistic in my opinion on the high end.

    The key will be grain price over the summer and strong egg coloring season in the near term, but long term they look great as the continue to push the premium eggs.
    Mar 30, 2015. 03:11 PM | 1 Like Like |Link to Comment
  • Horsehead Holding: Low Cost Commodity Operator Trading Below Replacement Value [View article]
    zINC SPOT price has bounced back to .95/lb up from .9 last week. 52 week high is 1.01. They inventory of Zinc is at low set back in 2007. I called Zinc and the plant has been restarted.
    Mar 27, 2015. 04:40 PM | Likes Like |Link to Comment
  • Cal-Maine Foods: A Long Term Growth Play [View article]
    FYI CALM has two classes of the stock with 10-1 voting for Adams's family stock. They don't want to sell and they are GREAT managers. They are very selective in acquiring other firms and don't over pay or take on debt. The egg industry is very fractional which offers a lot of growth in the future through acquiring other firms. They key for their margin is the speciality eggs, which they have done a great job growing. They make a lot more per dozen. Egg demand growth is about 3-5% annual, but heart association is beganing to learn that eggs are not the source of cholsetral and not the bad for you. BIG PLUS for EGGS growth This is a true WARREN BUFFETT type company.....
    Mar 20, 2015. 02:16 PM | 4 Likes Like |Link to Comment
  • Horsehead Holding: Low Cost Commodity Operator Trading Below Replacement Value [View article]
    Research analysts at BB&T Corp. initiated coverage on shares of Horsehead Holding Corp. (NASDAQ:ZINC) in a report released on Friday. The firm set a “buy” rating on the stock.
    A number of other firms have also recently commented on ZINC. Analysts at FBR Capital Markets lowered their price target on shares of Horsehead Holding Corp. from $21.00 to $20.00 and set an “outperform” rating on the stock in a research note on Monday, February 2nd. Analysts at Zacks downgraded shares of Horsehead Holding Corp. from a “neutral” rating to an “underperform” rating and set a $13.20 price target on the stock in a research note on Tuesday, January 27th. Finally, analysts at Oppenheimer reiterated an “outperform” rating and set a $23.00 price target on shares of Horsehead Holding Corp. in a research note on Wednesday, January 7th. One investment analyst has rated the stock with a sell rating and four have issued a buy rating to the stock. The stock presently has a consensus rating of “Buy” and a consensus target price of $18.73.
    Mar 20, 2015. 01:25 PM | 1 Like Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    Unless their is something I am missing about ALSK.... The stock is off 30% since I started commenting on it almost a year ago. ( i have had NO position in this LONG or SHORT in several years) AT&T and GCI both cut their long haul Fiber rates by 30% to 60% depending on client. That does not bode well for ALSK back haul Fiber biz (they used $100mm in cash to build a new line to lower 48 about 5 years ago) I think this will also hurt them down the road.
    With 400 plus million in debt, declining revenue and key asset already sold, there is not much left to say. Personally I picked LVLT and twtr in telecom space. I GOT lucky with buyout of Twtr and that both stocks moved up. The debt of LVLT 3 and poor management worried me about LVLT for several years. With new management team and improved growth, i re entered into LVLT. My view is the consolidation with TWTR will really add to bottom line. TWTR gives LVLT the "last mile to clients" they did not have. With huge network and TWTR clients they should see rev and bottom line growth and hopefully START TO PAY DOWN the boat load of DEBT.....if they don't then I will leave the party......
    Aug 27, 2014. 03:29 PM | Likes Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    I have commented on this in the past and don't see any thing positive for ALSK..

    The debt will bring them down.
    Aug 15, 2014. 08:22 AM | Likes Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    GCI has started to respond to price wars from ATT in Alaska for cell service The impact may hurt ALSK payout down the road. Margins may be impacted for ACS
    Apr 17, 2014. 01:37 PM | Likes Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    Thanks...I don't own the shares, but listened to both GCI and ALSK call last week. Debt and Swaps a few years back was always an issue for me with ASC. They hard wire legacy biz is such a drag, but not a lot of options with it.

    Disclosure. I have been both long and short shares of both GNCMA and ALSK over the past 10 years. I have not held a position an either since 2011
    Mar 11, 2014. 02:45 PM | Likes Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    ACS partner in AWN seem to be in price war with ACS on broadband. GCI and ACS fight over that, but very worried impact of Verizon. It sounds like the Retail outlets are a drag on earnings,but can't trim back in fear of losing some future payouts from awn. Please comment if I am missing something
    Mar 11, 2014. 11:39 AM | Likes Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    Below is a great link about Valuation from the TOP finance Professor at NYU. The Speech is to CFA Forum in NYC...If you have time a great listen......

    <iframe src="http://bit.ly/18WCINw" width="480" height="900" frameborder="0" id="feed-embed-stand-a... scrolling="auto"></iframe>
    Nov 22, 2013. 01:26 PM | 1 Like Like |Link to Comment
  • Culture Will Drive Further Results At Alaska Communications [View article]
    AWN realized over $25 million in net income and free cash flow of over $20 million. ACS’ preferred dividends from AWN for the quarter are $9.5 million.
    Nov 22, 2013. 11:52 AM | 1 Like Like |Link to Comment
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27 Comments
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