With export demand running strong and grain prices easing, protein producers like Smithfield (NYSE:SFD), Tyson (NYSE:TSN) and Pilgrim's Pride (NYSE:PPC) have been strong this fall. The trouble, though, is that a strong run doesn't erase a basic problem with these companies - they seldom ever earn much (if anything) above their cost of capital, and it's difficult to argue paying any premiums to book value to own these shares.
Less Bad Is Good for the Second Quarter
Smithfield's second quarter highlights how strange the Wall Street world can be, as the company's performance in absolute terms was not all that great. Performance was better than expectation, though, so it will go down as an all-in-all solid performance.
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http://stocks.investopedia.com/stock-analysis/2011/Dont-Pig-Out-On-Smithfield-SFD-TSN-HRL-SAFM1212.aspx
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