Del Monte Pacific

Del Monte's price has moved up with high volumes these few days. Its price is now above the rights price of 32.5 cents. Lee Pineapple would have regretted not subscribing to their rights entitlement.

(13-03-2015, 02:48 PM)sgpunter Wrote: Looking at the profile of DMPL MD/CEO, agree with zxiank, I certainly don't think this guy is a sucker who does things for altruistic reasons...my guess is he saw some synergies between the businesses...I certainly see no bit of possibility that this ambitious (and risky) move is not commercially driven.

Mr Joselito D Campos, Jr

Managing Director and Chief Executive Officer

Mr Joselito D Campos, Jr is Chairman and CEO of the NutriAsia Group of Companies, a major food conglomerate in the Philippines. He is also Chairman of Fort Bonifacio Development Corp and Chairman of Ayala-Greenfield Development Corp, two major Philippines property developers. He is a Director of San Miguel Corporation, one of the largest and oldest business conglomerates in the Philippines. Mr Campos is the Vice Chairman of Del Monte Foods, Inc, DMPL’s US subsidiary. He is also a Director of FieldFresh Foods Private Ltd, a joint venture of the Company with the Bharti Group of India. He was formerly Chairman and CEO of United Laboratories, Inc and its regional subsidiaries and affiliates. Unilab is the Philippines’ largest pharmaceutical company with substantial operations in the Asian region. Mr Campos is the Honorary Consul in the Philippines for the Republic of Seychelles. He is also Chairman of the Metropolitan Museum of Manila, Bonifacio Arts Foundation Inc, The Mind Museum and the Del Monte Foundation. He is a Trustee and Global Council Member of the Asia Society in the Philippines; a Trustee of the Philippines-China Business Council, the Philippines Center for Entrepreneurship and the World Wildlife Fund-Philippines; and a Director of the Philippines Eagle Society. Mr Campos holds an MBA from Cornell University.

Looking at the high volume, I believe accumulation is in progress and weak hands have been flushed out. Many would have rushed to sell off their rights at break even when they could have given that it momentarily fell below rights price for awhile.

(26-03-2015, 01:57 PM)Louhan Wrote: Del Monte's price has moved up with high volumes these few days. Its price is now above the rights price of 32.5 cents. Lee Pineapple would have regretted not subscribing to their rights entitlement.

From another angle, the drive down of share price could be due to Lee Pineapple not subscribing the rights and disposing the nil-paid. Market was merely correcting itself.

I'm just speculating but the recent price surge may have something to do with Heinz-Kraft merger. Food companies are consolidating across the globe and eventually the smaller players will all get eaten up leaving only the big fishes. I strongly believe Del Monte Pacific will be one of the big fishes remaining.

I have no complaints about Lee Pineapple selling their rights as I had mostly likely bought some from them.

I also didn't think the Campos family will dump so much money into a loss making venture. Following the Big Boys at the same price they get in at, whilst not fool proof, seldom goes wrong (in the long run at least) in my opinion.

I always like to buy stock cheap, so when it hit 0.305, i am very tempted to buy, seems like those asymmetric payoff situation, lose little and win big. I think it is a good business with good cashflow, the only concern i have is the level of debt, just feel that if you have taking debt of X time, then your reward should also be X time, logical right? at least when buying 4D is like that. in this situation, i dont feel that the return is proportional the the increase in the debt, hence in the end i decided to give it a miss. right now it is 0.38, Looking back I definitely feel abit of regret. I think my theoretical MM theory proportional reward and risk thing is completely wrong, reason being, i have overestimated the volatility of the stock and underestimated determination of the Campos family, hence the risk is not as big as i think, i mean, yes, more debt, but might not mean more risk, as the business is good, it can generate cashflow to cover the debt under the most dire circumstance, so it is not like 4D or some theoretical MM theory proportional reward and risk thing, that is a mistake I have when I gamble too much and forgot a stock is a business

To judge whether a stock is cheap or not, we need to give it a valuation. Once we have that number, it will be easier to see if it's really cheap (or not). Of course, there is no correct method to value a company and it can varies between individual.

Another fun fact to note for Del Monte , they were trading at $0.45+ before the rights price was announce. It dropped till 0.305 after the rights issue was completed. The company should be in a stronger position (more cash/less debt, less interest expenses) after the rights, but yet the price is even lower than before the rights. One of the prices quoted by the market has to be incorrect.

(27-03-2015, 02:22 PM)testwrite Wrote: I always like to buy stock cheap, so when it hit 0.305, i am very tempted to buy, seems like those asymmetric payoff situation, lose little and win big. I think it is a good business with good cashflow, the only concern i have is the level of debt, just feel that if you have taking debt of X time, then your reward should also be X time, logical right? at least when buying 4D is like that. in this situation, i dont feel that the return is proportional the the increase in the debt, hence in the end i decided to give it a miss. right now it is 0.38, Looking back I definitely feel abit of regret. I think my theoretical MM theory proportional reward and risk thing is completely wrong, reason being, i have overestimated the volatility of the stock and underestimated determination of the Campos family, hence the risk is not as big as i think, i mean, yes, more debt, but might not mean more risk, as the business is good, it can generate cashflow to cover the debt under the most dire circumstance, so it is not like 4D or some theoretical MM theory proportional reward and risk thing, that is a mistake I have when I gamble too much and forgot a stock is a business

(27-03-2015, 06:06 PM)zxiank Wrote: To judge whether a stock is cheap or not, we need to give it a valuation. Once we have that number, it will be easier to see if it's really cheap (or not). Of course, there is no correct method to value a company and it can varies between individual.

Another fun fact to note for Del Monte , they were trading at $0.45+ before the rights price was announce. It dropped till 0.305 after the rights issue was completed. The company should be in a stronger position (more cash/less debt, less interest expenses) after the rights, but yet the price is even lower than before the rights. One of the prices quoted by the market has to be incorrect.

(27-03-2015, 02:22 PM)testwrite Wrote: I always like to buy stock cheap, so when it hit 0.305, i am very tempted to buy, seems like those asymmetric payoff situation, lose little and win big. I think it is a good business with good cashflow, the only concern i have is the level of debt, just feel that if you have taking debt of X time, then your reward should also be X time, logical right? at least when buying 4D is like that. in this situation, i dont feel that the return is proportional the the increase in the debt, hence in the end i decided to give it a miss. right now it is 0.38, Looking back I definitely feel abit of regret. I think my theoretical MM theory proportional reward and risk thing is completely wrong, reason being, i have overestimated the volatility of the stock and underestimated determination of the Campos family, hence the risk is not as big as i think, i mean, yes, more debt, but might not mean more risk, as the business is good, it can generate cashflow to cover the debt under the most dire circumstance, so it is not like 4D or some theoretical MM theory proportional reward and risk thing, that is a mistake I have when I gamble too much and forgot a stock is a business

More shares and more perceived risk of yet another rights issue coming.

I suppose another way to look at it is to ascertain whether del monte can pay their loans given the still high levels of debt. I personally think this is not a short turnaround story.

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The exceptional high volumes with the increase in prices seem to show that some big investor is accumulating the shares. Perhaps he knows that the price of Del Monte is highly undervalued.

(27-03-2015, 07:43 PM)thor666 Wrote:

(27-03-2015, 06:06 PM)zxiank Wrote: To judge whether a stock is cheap or not, we need to give it a valuation. Once we have that number, it will be easier to see if it's really cheap (or not). Of course, there is no correct method to value a company and it can varies between individual.

Another fun fact to note for Del Monte , they were trading at $0.45+ before the rights price was announce. It dropped till 0.305 after the rights issue was completed. The company should be in a stronger position (more cash/less debt, less interest expenses) after the rights, but yet the price is even lower than before the rights. One of the prices quoted by the market has to be incorrect.

(27-03-2015, 02:22 PM)testwrite Wrote: I always like to buy stock cheap, so when it hit 0.305, i am very tempted to buy, seems like those asymmetric payoff situation, lose little and win big. I think it is a good business with good cashflow, the only concern i have is the level of debt, just feel that if you have taking debt of X time, then your reward should also be X time, logical right? at least when buying 4D is like that. in this situation, i dont feel that the return is proportional the the increase in the debt, hence in the end i decided to give it a miss. right now it is 0.38, Looking back I definitely feel abit of regret. I think my theoretical MM theory proportional reward and risk thing is completely wrong, reason being, i have overestimated the volatility of the stock and underestimated determination of the Campos family, hence the risk is not as big as i think, i mean, yes, more debt, but might not mean more risk, as the business is good, it can generate cashflow to cover the debt under the most dire circumstance, so it is not like 4D or some theoretical MM theory proportional reward and risk thing, that is a mistake I have when I gamble too much and forgot a stock is a business

More shares and more perceived risk of yet another rights issue coming.

I suppose another way to look at it is to ascertain whether del monte can pay their loans given the still high levels of debt. I personally think this is not a short turnaround story.

Sent from my D5503 using Tapatalk

DMPL also listed on the Philippines Stock Exchange? Last I saw it was 12.78php on PSE, so that works out to about 39 singapore cents. Now it's at 44.5 S cents. Any comments, or am I up the wrong tree?

this is latest result
http://infopub.sgx.com/FileOpen/DMPL_4Q_...eID=357819
for fiscal year 15

loss is (38,047)

the loss cause by
acquisition-related and non-recurring expenses worth US$62.6 million, after tax

Inventory step-up of US$24.6 million

but there is a gain of income Bargain Purchase- Sager Creek (26,568)

assume we remove all the 1 off items, the profit is 23000

that is 1.8 us cents per share

at current price of 0.345

P/E is about 14.2

total debt is 2,306,005

which is 180 cents per share, continue this down, it will takes 100 years to pay off the debt