http://www.blogvesting.com/2007/05/27/safm-modest-upside-and-possible-short-squeeze/ Articles on value investing Fri, 25 Jun 2010 12:44:38 +0000 hourly 1 http://wordpress.org/?v=3.0 http://www.blogvesting.com/2007/05/27/safm-modest-upside-and-possible-short-squeeze/comment-page-1/#comment-13 Anonymous Fri, 01 Jun 2007 10:58:24 +0000 http://blogvesting.com/2007/safm-modest-upside-and-possible-short-squeeze/#comment-13 The huge short interest could, in part, be hedged positions. In that case, we wouldn't see much of a short squeeze. The huge short interest could, in part, be hedged positions. In that case, we wouldn’t see much of a short squeeze.

]]> http://www.blogvesting.com/2007/05/27/safm-modest-upside-and-possible-short-squeeze/comment-page-1/#comment-11 Brian Wed, 30 May 2007 22:26:37 +0000 http://blogvesting.com/2007/safm-modest-upside-and-possible-short-squeeze/#comment-11 Good article. I know SAFM well (have been long since $27 for our hedge fund). I think $100M is a laughable upside to earnings (way too conservative - think $130M - $140M), but I don't think your price target of $55 is that conservative. We're looking for a similar price. Don't forget that their production in 2008 will be up over 30% from 2004 (their last peak, when earnings were $91M) and their product mix is more favorable to the current environment. Also note that they are completely hedged to grain costs through the summer and into the early fall, so corn prices don't impact the bottom line, they just impact the supply discipline of the industry. I would look to SDA as an acquiror. They are looking to get into the US. Good article. I know SAFM well (have been long since $27 for our hedge fund). I think $100M is a laughable upside to earnings (way too conservative – think $130M – $140M), but I don’t think your price target of $55 is that conservative. We’re looking for a similar price. Don’t forget that their production in 2008 will be up over 30% from 2004 (their last peak, when earnings were $91M) and their product mix is more favorable to the current environment. Also note that they are completely hedged to grain costs through the summer and into the early fall, so corn prices don’t impact the bottom line, they just impact the supply discipline of the industry. I would look to SDA as an acquiror. They are looking to get into the US.

]]> http://www.blogvesting.com/2007/05/27/safm-modest-upside-and-possible-short-squeeze/comment-page-1/#comment-12 Brian Wed, 30 May 2007 22:26:37 +0000 http://blogvesting.com/2007/safm-modest-upside-and-possible-short-squeeze/#comment-12 Good article. I know SAFM well (have been long since $27 for our hedge fund). I think $100M is a laughable upside to earnings (way too conservative - think $130M - $140M), but I don't think your price target of $55 is that conservative. We're looking for a similar price. Don't forget that their production in 2008 will be up over 30% from 2004 (their last peak, when earnings were $91M) and their product mix is more favorable to the current environment. Also note that they are completely hedged to grain costs through the summer and into the early fall, so corn prices don't impact the bottom line, they just impact the supply discipline of the industry. I would look to SDA as an acquiror. They are looking to get into the US. Good article. I know SAFM well (have been long since $27 for our hedge fund). I think $100M is a laughable upside to earnings (way too conservative – think $130M – $140M), but I don’t think your price target of $55 is that conservative. We’re looking for a similar price. Don’t forget that their production in 2008 will be up over 30% from 2004 (their last peak, when earnings were $91M) and their product mix is more favorable to the current environment. Also note that they are completely hedged to grain costs through the summer and into the early fall, so corn prices don’t impact the bottom line, they just impact the supply discipline of the industry. I would look to SDA as an acquiror. They are looking to get into the US.

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