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The Dirt Cheap Value Portfolio - A Whole New Look

Dec. 07, 2018 5:11 PM ETBRID, F, GE, LUB, WPRT, JVA, WPRT:CA184 Comments
Mark Krieger profile picture
Mark Krieger


  • SuperValu eliminated, while Ford and General Electric are added.
  • A Luby's proxy fight emerges.
  • Coffee Holdings Co. is one hot cup of coffee, but fails to get any love.

It has been nearly one year since I last submitted an article on the "DCVP" and since that time, the DJIA has climbed a mere 1% from 25,286 to 25,538.

The "DCVP" in massive contrast rose 7.6% from $27.89 to $30.00 based on the winning effort of Bridgford Foods (BRID) (racing 42% higher) and United Natural Foods (UNFI) purchase of SuperValu (SVU) (tallying a 70% premium). Offsetting those large gains were dismal performances in both Westport Fuel Systems (WPRT) and Luby's (LUB), falling 47% and 43% respectively.

Coffee Holding (JVA), despite a 50% two-day rally in June, ended up completely flat. The new pricing of the "DCVP" for measurement purposes begins at $41.69. Going forward, I expect this defensive portfolio to rise 25% during the next 12 months, regardless of the direction of the overall market. This forecast is predicated on the fact that five of the six components are extremely oversold, therefore, vulnerable to M&A activity. In addition, limited downside is present, as most of the ticker symbols, all trade near five-year lows.

The revised lineup:

Bridgford Foods: This little company keeps humming along, just fine. Its new beef jerky plant could be finished within the next year. This verity would allow its current jerky production capacity to triple and monetize its existing beef jerky plant's real estate. That property, although only about 5 acres, could bring a substantial windfall to shareholders.

Luby's Inc.: Bandera Partners, Luby's largest outside shareholder, with an 8.9% ownership position, apparently has had enough with Luby's current direction. They delivered a scathing letter to the organization revealing their intention to place five of their own nominees for election to the Board of Directors. Translation? A proxy fight is on our hands. One analyst theorizes that if Bandera is successful, the company could be liquidated at $3. If so, Bandera could really make out, as they

This article was written by

Mark Krieger profile picture
I am a value/activist investor dedicated to the following ideals: (1) Focus on high relative strength, (2) Buy low, sell high aka "buy the dip, sell the rip" (3) Short high, cover low, (4) Go against the crowd, (5) It's all about the rules and discipline- hold them dear (6) Analyze the balance sheet-seek low debt,high cash and hidden value scenarios (7) Cut your losses short, let your gains run, (7) Don’t get emotional, (8) Follow the insiders- buy if they are buying, sell if they are selling (9) Be greedy when others are fearful and fearful when others are greedy.(10) Don't argue with the market unless you detect an inefficiency present-it is smarter than you are. In summary, some of these ideas might be construed as rather trite and overused, but consistent use of them pays off in the long run. Mr. Krieger specializes in the food sector and is the originator of the "Basic Food Fund" index and the "Dirt Cheap Value Portfolio".Why the food sector? "everybody has to eat'! He graduated from the University of Southern California with a BS in Business Administration with an emphasis in Corporate Finance. Mark resides in Cowan Heights, California with his wife, son and pug and is interested in mountain biking, gardening and reading.

Analyst’s Disclosure: I am/we are long F, GE, JVA, LUB, WPRT, BRID. 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.

this is a re submission, as requested by Mike Taylor

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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