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No. of Recommendations: 16
This is instalment no. 4. I am changing the format slightly differently, favoring a "Plus", "RedFlag" and Valuation section. Please throw a rec if you like me to continue the series.


"I am one of the largest consumer packaged food provider in the US. My products are designed for quick, easy and minimal cooking, filling the need of working families and busy individuals. While my critics consider my products 2nd Tier, many consumers swear by my tomato ketchup and my kosher hotdogs, even MacDonalds outsources their french fries to me for production; my barbecue spray is highly rated by most hardcore weekend grillers.

In 2005, I had a change in CEO after 10 years. The current CEO has had 25 years in the CPG business having worked in PepsiCo and General Mills. He brings great hope to an otherwise tough business. Some of the initiatives that has been in place is the gradual transition from (and selling of) commodity food processing business towards retail products. My most recent divestiture has been the refrigerated meat division.

Some of my biggest critics charge that:

* I do not spend enough on branding, and this adds pressure to my somewhat hit-and-miss brand.

* Another charge is that my high dividend yield is unsustainable. Although so far, the Free Cash Flow has been steadily increasing.

* The biggest criticism has been reserved for the perceived lack of growth. While it is true that I am roughly half of my revenues from 10 years ago, my profit margin is now more than double, this is also shown on my ROE and ROA which has steadily crept up in the last 10 years, especially since selling away the commodity businesses.

I am selling at a historic lows in P/E, P/S, P/B and even P/CF because of:

* Reinstatement of results around the 2002 period this past december.
* Latest quarterly results left alot to be desired.
* Fear of Dividends will be cut.

Who am I ?"


raytoei
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