Brazil's largest food company, BRF SA (NYSE:BRFS),
continues to show progress with its self-improvement efforts. Although
economic stress on Brazilian consumers has been leading to some
trading-down in buying patterns, BRF has offset this with a more
profitable SKU mix and an increased focus on operating efficiency.
Despite an unexpected change in the company's leadership, the company
looks on track with previously announced plans to shift more emphasis to
higher-margin processed/packaged products and to prioritize margin and
cash flow efficiency.
The biggest problem with BRF shares, apart
from the volatility of the Brazilian economic and political environment,
is valuation. I do believe that BRF has a plan that can lead the
company into the ranks of the multinational packaged food giants, but
the shares reflect a lot of optimism. I'm in no rush to sell just
because of valuation, but new investors may find it wiser to wait for
one of the seemingly inevitable corrections in the Brazilian stock
market before stepping to the plate.
Continue reading here:
BRF's Operational Improvements Shining Through
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