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No. of Recommendations: 3
....the more you're worth.(biological gain)

...has make for another nice FK move down (for those who can come to grips with the value).

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No. of Recommendations: 1
This requires a fair bit of expertise to form a decent opinion.
Probably dissecting the cash flow statement is the place to start.

I keep watching this one, but haven't jumped in.
I was mainly a little concerned about the dilution trend.
It didn't hurt the EPS growth rate, but I suspected that a culture of
issuing too many shares too easily might outlast the era of high EPS growth rates.
Plus, the stock was cheap given the assumption of continued EPS growth
even at slightly a lower rate, but not that cheap in flatter scenarios.
At a P/E of 11 times (now questioned) earnings, at least that latter
point has been more or less addressed.

Their diversification may be at the heart of any descent into being a problem child.
It's easy to speculate that that was the result of an over-zealous
desire to maintain growth at any cost.
I like the price-resilient pass-through business (and in a pinch the
processing units) more than the capital-intensive price-exposed production businesses.

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No. of Recommendations: 3
As to the "growth at any price" concept, I think I've mentioned this before, but they are definitely buying very aggressively in the California Central Valley and in Arizona. Some of the buying has been processing facilities of which there are many, some probably could be bought for a decent price. Farmland however is another story. I work as the financial manager / janitor for a decent size farming operation (7-8,000 acres), and the prices being paid for a land is pretty widely considered to be maybe not bubble territory, but certainly based on some rosy assumptions of increasing crop commodity pricing. Basically, if crop prices don't keep going up quite a bit, the buyer is going to get hurt, just doesn't pencil. I don't know the state of Arizona land valuations, but apparently, that is being done to expand into peanuts, which I hear from a number of people is going to be in great demand for some reason. (I don't know why, and my house eats a lot of peanut butter, and I pay very low prices for it)

Don't know if it's a fair comparison, but the central valley is the largest pistachio and almond producing area anywhere in the world as far as I know, and prices for raw nuts is much higher this year than last, apparently based on demand from abroad. One thing to consider is that if there are water problems, and ALL of this activity is completely irrigated, there will be blood in the streets, or dirt roads as it were.

California is maybe the only place in the country where you can just put in deep wells at will, no permits, no environmental review, nada. So everybody is putting in orchards because they're low maintenance and highly profitable, but every one takes more and deeper wells, and at some point there WILL be a crisis over ground water. Without abundant water, the yields will drop dramatically, and the value of all this land will be severely compromised. The issue of using what may well be considered to be "community water" for private profit is completely ignored in the great socialist republic of California, shocking on many levels. Goes to the power of the farm lobby I'm sure. Trust me, there are no poor farmers in California.

.02 / Chris
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