Darling Ingredients: Prepare For Guidance Upgrades

LDV Research
286 Followers

Summary

  • Darling Ingredients has acquired four businesses since the start of 2022, which are still in the process of being integrated.
  • Diamond Green Diesel is currently producing EBITDA at margins much higher than guidance.
  • The company's Group EBITDA guidance appears conservative, providing opportunity for upgrades throughout the year as each acquisition contributes a full year.
Biofuel filling station

Scharfsinn86

Thesis

Darling Ingredients (NYSE:DAR) has had a huge year, having acquired 4 separate businesses since the start of 2022. This has increased raw material processing volumes but has reduced margins while these are digested. Based on my analysis of the acquisitions and

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286 Followers
LDV stands for Long Duration Value. It characterises my investing style and the companies I seek to own. I am a market cap and industry agnostic investor seeking high quality, growing companies that can be comfortably held for decades. My emphasis is on return on invested capital and free cash flow per share as I believe these are the key drivers of long term shareholder value creation.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of DAR either through stock ownership, options, or other derivatives. 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.

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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