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When I was a lowly college student, it was often hard to find two nickels to rub together at 2 am on a Friday night after 8 solid hours of carb consumption. Back then, ATM machines were not very prevalent, and once your wallet was empty, it was time to go home. Unfortunately, there was a Roy Rogers restaurant located across the block from our fraternity house. On so many of those nights, we’d walk into the Roy Rogers and stumble up to the counter. There, in full glory, not more than 3 feet away, sat the display container which housed over 100 pieces of mouth watering fried chicken. After ordering a small Coke, the display container held about 84 pieces of fried chicken and, later that night, the pockets of our football jackets smelled like fried chicken. It seemed like the astute Roy’s management quickly caught on and they began checking our jacket pockets. You’d be surprised where pieces of fried chicken can be hidden. Pretty soon, our fraternity underwear had the aroma of extra crispy. As they say, all good things must come to an end. After months of not being able to reconcile their fried chicken inventory, Roy Rogers on 40th and Walnut no longer would house their fried chicken on the countertop. It was moved way in the back, forever out of reach. Young $$$MR. MARKET$$$ was very very sad. My young strapping physique was craving protein and there was none to be had.
Now, at age 44, when I’m in the gym in the morning slamming 385 lbs like it is my girlfriend, my body still craves protein. You can only eat so much Nitro Tech until you start to leave cinder blocks in your commode. Sorry, but Dr. Atkins was an endomorph and red meat doesn’t cut it. If you want to blow out an aorta, that’s your business. Well they blew up the chicken man in Philly last night, and they blew up his house too.
Today I bought SAFM (Sanderson Farms) at 57.34. I will sell it in 4 to 6 weeks at 66.25. Here’s why I like SAFM:
SAFM stock is up over 212% in the last 52 weeks yet its P/E is less than 14. It has been bounding to new highs like a steady staircase, with an r^2 correlation of 0.91.
I like to eat healthy, tins of tuna, chicken from a chain store, eggamuffin.....yea When I am trying to get lean I eat Nitro Tech chicken, tuna, and more chicken. Sanderson knows chicken. His name even sounds like the godfather of chicken (Col Sanders). The company dressed 1.4 billion pounds of chicken. That’s a lot of those little cluckers to put in pants and shirts but it seems to be working for Sanderson. Check out the $$$Mr. Market$$$-like chart, not to mention earnings are coming up and the recent downward trend to scoop SAFM cheap because the birds had colds.(avian flu). Avian Flu?? Don’t make me laugh, I put Avian Flu in my coffee in the morning. Nothing a little Tabasco can’t take care of. Pass the hot sauce.. they also serves good gumbo and shrimp creole!
Today, Sanderson Farms is a Company with products shipped to nearly every state in the country and to many foreign nations. The Company is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. Sanderson topped $870 million in sales in fiscal 2003, setting a new record for the Company.
From the beginning, Sanderson Farms has been an honest, down-to-earth leader in the chicken business – one that emphasized family values long before it was a hot trend to do so. The company actually began in 1947 as a farm supply business, which sold seed, feed, fertilizer, and other farm supplies. In 1951, D.R. Sanderson, Sr., D.R. Sanderson, Jr., and Joe Frank Sanderson organized a partnership under the name of "Sanderson Brothers." During the next few years, poultry production was added to the business. Then, in 1955, Sanderson Farms was incorporated, and the company, which started as a feed and seed store, began the rise to becoming the top-quality chicken producer we are today. Derek Sanderson was the renegade Sanderson. Instead of raising chickens, he played for the Boston Bruins.
Sanderson Farms, ranked among the top seven poultry producers in the country, currently employs over 8,500 people and contracts with over 600 independent growers. As a result, Sanderson Farms has grown steadily and quickly, becoming one of the largest poultry companies in the industry. The company sells ice pack, chill pack and frozen chicken, in whole, cut-up and boneless form, principally under the Sanderson Farms brand name, to retailers (including national and regional supermarket chains and local supermarkets), distributors and fast food operators primarily in the southeastern, southwestern and western U.S.
What’s really great about SAFM? Louise Mandrell has endorsed Sanderson Farms chicken for over 20 years and look how good she looks? If she was endorsing some meat packing plant, she’d look like Mama Cass.
Processed chicken is first salable as an ice packed whole chicken. The company adds value to its ice packed whole chickens by removing the giblets, weighing, packaging and labeling the product to specific customer requirements, and cutting the product based on customer specifications. The additional processing steps of giblet removal, close tolerance weighing and cutting increase the value of the product to the customer over whole chickens by reducing customer handling and cutting labor and capital costs, reducing shrinkage related to cutting, and ensuring consistently sized portions.
The beauty of this investment is that the trend is your friend. Yes..the Atkins rage has taken over this country. We all should be cutting back on the carbs, ask any breadman at your neighborhood gym. However, eating bacon and hamburger ain’t the way to do it. $$$MR. MARKET$$$, with his million dollar physique, knows that chicken and tuna are the way to go. Lots of people will soon know that too.
Fish prices are rising and have been rising for over a decade, and it won’t be long for chicken prices to follow as fish gets to be too expensive as a source of healthy protein. According to Sanderson, market prices for all poultry products were higher during the fourth quarter than in the prior-year period. As measured by a simple average of the Georgia dock price for whole chickens, prices increased approximately 7.8% in the Company's fourth fiscal quarter compared with the same period in 2002. Boneless breast meat prices during the quarter were approximately 26.5% higher than the prior-year period and were up 17.2% for the year. Bulk leg quarter prices increased approximately 67.4% during the quarter and were up 12.8% for the year. Wing prices averaged 71.2 cents per pound, up 47.9% from the average of 48.1 cents per pound during the fourth quarter of fiscal 2002. You sees??
The idea is nowhere near played out. There are no low-carb magazines or restaurants yet, and low-carb products are only just hitting the mass-market stores and mainstream restaurants. Soon we will have fast food low carb / high protein joints and chicken will be the staple. Just wait.
Take a look at what happened in Japan. They just want to be like Americans. 50 years ago, only 5% of the Japanese drank coffee. Now 75% of them do. Once China gets hip on the internet, the Chinese will follow the same behavior patterns. Wait until they jump on the South Beach diet and start pumping iron. Chicken…chicken..chicken. Gimmeeee more chickens.
Is this happening already? Maybe…just maybe. SAFM’s revenues have grown sequentially each and every year for the last ten years. Not many companies can make that claim. In the last 3 years, revenues have grown at a clip of 8% per year and 2003 was a record for net income! And……they also pay a dividend…..and…they also will split 3 for 2 this month….and…people are eating more chicken.
SAFM has paid down their debt so that it is a meager 9% of total capitalization. Return on Assets is an amazing 18.7% (vs. industry average 3.7%) while Return on Equity is 30.6% vs. industry average 9.3%. The time has come for all good men to consume chicken. Last year, SAFM made $4.12/share. 2004 will be the year of the chicken, and SAFM will nail $5.15/share as they crack $1 billion in chicken sales. Even at its humble P/E of 14, these earnings will scratch its share price to $72.10/share. There’s only one ANALyst following this stock, so ANALyst coverage is essentially meaningless.
Here is something meaningful….what the boss has to say. Take it from the colonel:
"Sanderson Farms continued to demonstrate solid execution in the fourth quarter of fiscal 2003, capping off an outstanding year for the Company," said Joe F. Sanderson, Jr., president and chief executive officer of Sanderson Farms, Inc. "Earnings for both our fourth quarter and fiscal year ended October 31, 2003, set records and reflect the continued overall improvement in the chicken market compared with conditions a year ago. Our ability to focus and execute on the key areas for success in our business -- delivering a profitable and favorable product mix, efficiently managing our operations and maintaining a strong financial position -- allowed us to achieve these results. More importantly, we are pleased to deliver another year of improved earnings for our shareholders."
"One of our key financial objectives for 2003 was to aggressively manage our working capital and other key components of our balance sheet, and we are very pleased to report that our financial position and liquidity improved considerably in fiscal 2003," added Sanderson. "As of October 31, 2003, our balance sheet reflects stockholders' equity of $197.1 million and net working capital of $82.2 million. During fiscal 2003, we reduced our long-term debt by over $28.3 million. At the end of our fiscal year, our long-term debt totaled $21.6 million and our debt to total capitalization ratio was 11.6%. In light of our strong cash flow during fiscal 2003, our Board of Directors declared a special dividend of $0.50 per share that was paid in October. The Board also increased our regular quarterly dividend to $0.12 per quarter from $0.10 per quarter. Looking ahead, we hope to continue to build on this momentum in 2004.”
With the monies I make from my SAFM investment, I’ll be able to go to Roy Rogers and open my wallet and eat as much chicken as I want, without having to wash my clothes afterwards.
Now, at age 44, when I’m in the gym in the morning slamming 385 lbs like it is my girlfriend, my body still craves protein. You can only eat so much Nitro Tech until you start to leave cinder blocks in your commode. Sorry, but Dr. Atkins was an endomorph and red meat doesn’t cut it. If you want to blow out an aorta, that’s your business. Well they blew up the chicken man in Philly last night, and they blew up his house too.
Today I bought SAFM (Sanderson Farms) at 57.34. I will sell it in 4 to 6 weeks at 66.25. Here’s why I like SAFM:
SAFM stock is up over 212% in the last 52 weeks yet its P/E is less than 14. It has been bounding to new highs like a steady staircase, with an r^2 correlation of 0.91.
I like to eat healthy, tins of tuna, chicken from a chain store, eggamuffin.....yea When I am trying to get lean I eat Nitro Tech chicken, tuna, and more chicken. Sanderson knows chicken. His name even sounds like the godfather of chicken (Col Sanders). The company dressed 1.4 billion pounds of chicken. That’s a lot of those little cluckers to put in pants and shirts but it seems to be working for Sanderson. Check out the $$$Mr. Market$$$-like chart, not to mention earnings are coming up and the recent downward trend to scoop SAFM cheap because the birds had colds.(avian flu). Avian Flu?? Don’t make me laugh, I put Avian Flu in my coffee in the morning. Nothing a little Tabasco can’t take care of. Pass the hot sauce.. they also serves good gumbo and shrimp creole!
Today, Sanderson Farms is a Company with products shipped to nearly every state in the country and to many foreign nations. The Company is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. Sanderson topped $870 million in sales in fiscal 2003, setting a new record for the Company.
From the beginning, Sanderson Farms has been an honest, down-to-earth leader in the chicken business – one that emphasized family values long before it was a hot trend to do so. The company actually began in 1947 as a farm supply business, which sold seed, feed, fertilizer, and other farm supplies. In 1951, D.R. Sanderson, Sr., D.R. Sanderson, Jr., and Joe Frank Sanderson organized a partnership under the name of "Sanderson Brothers." During the next few years, poultry production was added to the business. Then, in 1955, Sanderson Farms was incorporated, and the company, which started as a feed and seed store, began the rise to becoming the top-quality chicken producer we are today. Derek Sanderson was the renegade Sanderson. Instead of raising chickens, he played for the Boston Bruins.
Sanderson Farms, ranked among the top seven poultry producers in the country, currently employs over 8,500 people and contracts with over 600 independent growers. As a result, Sanderson Farms has grown steadily and quickly, becoming one of the largest poultry companies in the industry. The company sells ice pack, chill pack and frozen chicken, in whole, cut-up and boneless form, principally under the Sanderson Farms brand name, to retailers (including national and regional supermarket chains and local supermarkets), distributors and fast food operators primarily in the southeastern, southwestern and western U.S.
What’s really great about SAFM? Louise Mandrell has endorsed Sanderson Farms chicken for over 20 years and look how good she looks? If she was endorsing some meat packing plant, she’d look like Mama Cass.
Processed chicken is first salable as an ice packed whole chicken. The company adds value to its ice packed whole chickens by removing the giblets, weighing, packaging and labeling the product to specific customer requirements, and cutting the product based on customer specifications. The additional processing steps of giblet removal, close tolerance weighing and cutting increase the value of the product to the customer over whole chickens by reducing customer handling and cutting labor and capital costs, reducing shrinkage related to cutting, and ensuring consistently sized portions.
The beauty of this investment is that the trend is your friend. Yes..the Atkins rage has taken over this country. We all should be cutting back on the carbs, ask any breadman at your neighborhood gym. However, eating bacon and hamburger ain’t the way to do it. $$$MR. MARKET$$$, with his million dollar physique, knows that chicken and tuna are the way to go. Lots of people will soon know that too.
Fish prices are rising and have been rising for over a decade, and it won’t be long for chicken prices to follow as fish gets to be too expensive as a source of healthy protein. According to Sanderson, market prices for all poultry products were higher during the fourth quarter than in the prior-year period. As measured by a simple average of the Georgia dock price for whole chickens, prices increased approximately 7.8% in the Company's fourth fiscal quarter compared with the same period in 2002. Boneless breast meat prices during the quarter were approximately 26.5% higher than the prior-year period and were up 17.2% for the year. Bulk leg quarter prices increased approximately 67.4% during the quarter and were up 12.8% for the year. Wing prices averaged 71.2 cents per pound, up 47.9% from the average of 48.1 cents per pound during the fourth quarter of fiscal 2002. You sees??
The idea is nowhere near played out. There are no low-carb magazines or restaurants yet, and low-carb products are only just hitting the mass-market stores and mainstream restaurants. Soon we will have fast food low carb / high protein joints and chicken will be the staple. Just wait.
Take a look at what happened in Japan. They just want to be like Americans. 50 years ago, only 5% of the Japanese drank coffee. Now 75% of them do. Once China gets hip on the internet, the Chinese will follow the same behavior patterns. Wait until they jump on the South Beach diet and start pumping iron. Chicken…chicken..chicken. Gimmeeee more chickens.
Is this happening already? Maybe…just maybe. SAFM’s revenues have grown sequentially each and every year for the last ten years. Not many companies can make that claim. In the last 3 years, revenues have grown at a clip of 8% per year and 2003 was a record for net income! And……they also pay a dividend…..and…they also will split 3 for 2 this month….and…people are eating more chicken.
SAFM has paid down their debt so that it is a meager 9% of total capitalization. Return on Assets is an amazing 18.7% (vs. industry average 3.7%) while Return on Equity is 30.6% vs. industry average 9.3%. The time has come for all good men to consume chicken. Last year, SAFM made $4.12/share. 2004 will be the year of the chicken, and SAFM will nail $5.15/share as they crack $1 billion in chicken sales. Even at its humble P/E of 14, these earnings will scratch its share price to $72.10/share. There’s only one ANALyst following this stock, so ANALyst coverage is essentially meaningless.
Here is something meaningful….what the boss has to say. Take it from the colonel:
"Sanderson Farms continued to demonstrate solid execution in the fourth quarter of fiscal 2003, capping off an outstanding year for the Company," said Joe F. Sanderson, Jr., president and chief executive officer of Sanderson Farms, Inc. "Earnings for both our fourth quarter and fiscal year ended October 31, 2003, set records and reflect the continued overall improvement in the chicken market compared with conditions a year ago. Our ability to focus and execute on the key areas for success in our business -- delivering a profitable and favorable product mix, efficiently managing our operations and maintaining a strong financial position -- allowed us to achieve these results. More importantly, we are pleased to deliver another year of improved earnings for our shareholders."
"One of our key financial objectives for 2003 was to aggressively manage our working capital and other key components of our balance sheet, and we are very pleased to report that our financial position and liquidity improved considerably in fiscal 2003," added Sanderson. "As of October 31, 2003, our balance sheet reflects stockholders' equity of $197.1 million and net working capital of $82.2 million. During fiscal 2003, we reduced our long-term debt by over $28.3 million. At the end of our fiscal year, our long-term debt totaled $21.6 million and our debt to total capitalization ratio was 11.6%. In light of our strong cash flow during fiscal 2003, our Board of Directors declared a special dividend of $0.50 per share that was paid in October. The Board also increased our regular quarterly dividend to $0.12 per quarter from $0.10 per quarter. Looking ahead, we hope to continue to build on this momentum in 2004.”
With the monies I make from my SAFM investment, I’ll be able to go to Roy Rogers and open my wallet and eat as much chicken as I want, without having to wash my clothes afterwards.
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