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No. of Recommendations: 2
In the last newsletter Tom wrote that if after all the analysis you still don't feel comfortable with an investment, sell it. Well I've gotten to that point with FDP. After all the dividends were paid out my entry point was right around $25, so today I sold at a slight profit. That compares faborably to the money I would have lost had I invested in an index fund. However, if things look like they're improving or if Tom's review in two weeks is a glowing one that answers these concerns, I might consider coming back in.

Here are my concerns:

- With fuel price increases FDP is bound to be squeezed even further. Even if they hedge their bets on future fuel purchases that's still an additional cost. Although this has been a concern for some time now and the stock has recovered admirably, it's just not my cup of tea.

- I'm just not seeing any FDP pineapples around. I've looked everywhere where I've seen pineapples both in the South and here in the NorthEast and predominantly these are Dole pineapples. Costco carries Dole pineapples and my local grocery stores carry some even less-known brand. No Del Monte Gold anywhere.

- Analysts have written that the competitive advantage of the Sweet Gold pineapple will deteriorate as more companies produce a similar strand. I can't comment much on that but it seems like a credible threat and one that will seriously hurt FDP.

- Pineapples and bananas aren't too high on the low-carb diets list. Thus, it's thus quite possible that the whole fresh-cut fruit trend may very well bypass the main staples of FDPs products.

I understand what a deep value FDP is but I'm just not comfortable with the growth prospects, especially when there are companies like TACT, SCSS and BWLD around. If the price drops further I may consider getting in again due to the beefy dividend, but for now I'm out.

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I live over seas in Okinawa, Japan and work on the bases here. I shop both out in the Okinawan community and in the on base commisaries. And to tell you the truth, I have not seen a single FDP pineapple either.

I originally bought in at almost $24 and sold around $25+. I hate to admit such a short holding period but upon re-reading the FDP interview, I was not crazy about the CEO's perspective on not buying back his own shares... and the high dividend is just not worth it to me when I cannot even see the product.

I will keep my eye on it though.
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Pineapples may be their biggest buisness, but they are also working on their fresh cut line.

I'm stationed in S. Korea and I've seen almost nothing but FDP on and off base. The Commissary sells pretty much only FDP with only small quantities of Dole stuff.
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The ONLY pineapples I see in Vermont are FPD Sweet Gold's for what it is worth.

Dave
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The ONLY pineapples I see in Vermont are FPD Sweet Gold's for what it is worth.

Dave


Same here in Philadelphia Suburbs; nothing but Fresh Del Monte's, at many different grocery stores.

But I agree with the original poster, if you don't feel good about it, sell it.
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I also a lot of FDP pineapples in Publix stores in Atlanta

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Sam's Club is carrying Dole pineapples recently. I suppose I should sell my Wall-Mart stock.....

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I can't believe people would sell their stock in FDP based on what they see in their grocery story. I actually feel good about having this stock in my portfolioi. The only HG I'm considering selling is ESPD, but I'm going to wait for it to regain some ground prior to selling.
-Mark
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No. of Recommendations: 10
Such is why many some individual investors underperform and would do better in index funds. Fear and greed drive the markets and the HG newletter is obviously not a vaccine against either of these (selling off on no news and/or trying to play the pop). Sometimes experience can be an expensive proposition. I guess it's tough for some people to sit on their hands and just wait.

There hasn't really been any new information that would justify a sell here. To base a sell decision on ancedotal evidence is foolish indeed.

buylower
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Sam's in St. Louis only had FDP...and I caved and bought one.

XMFUberman
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"I can't believe people would sell their stock in FDP based on what they see in their grocery story."

Hi Mark,

I agree completely... I was thinking...Hey if you don't see them everywhere then that could mean they're selling everything they can grow :-) If this is the case then there's room for them to grow, so to speak.

Regards, Ken
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"I can't believe people would sell their stock in FDP based on what they see in their grocery story."

I can. Perhaps if it were the only reason someone sold a stock that otherwise looked very attractive, that might be foolish. But considering that two arguments for future expansion are that FDP can start providing more than just pineapples to current customers and that we're counting on increasing pineapple consumption in the US population, it seems logical to inquire just where these pineapples are being sold. Having actively looked at the fresh fruit section in every grocery store I walked into in Conn, NC, SC and NY (including three separate Costco's) for the past six month (about 20 stores) and finding no Fresh Del Monte presence in any of them makes it less likely that FDP will benefit from any of the two aforementioned trends.

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Sam's in Alaska is selling FDP pineapples @ $4.99. They have been sitting for a while, but are still good if you cut them up within a day or two of getting home.

Fred Meyer also carries FDP. They have gone to a big display in which they sell FDP pineapples uncut by the pound (1.79 per #). For those of you who aren't quite sure how much a pineapple weighs, the last one I bought took an 8 dollar chunk out of my wallet! But they seem to be moving.......

Regards,

Dan
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In spain FDP, has near a monopoly state, you find them almost in every grocery store, however, in Italy, I was surprised just to find chiquita. I did not even know they produced pineapples.
In spain, you can find some Dole pinapples to, but it is quite hard.
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We get a new pineapple every week when my DW goes shopping . We have no trouble finding FDP here in Cleveland,Ohio.

I still like the stock the dividend the value of it interests me as some of our other holding are more "growth" stocks.

--George
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I live in germany and can't find FDP either. But my meager portfolio is taking such a beating that FDP is my leader. I'm definitely not selling. Between it and the dividend, I wish I had more of it.

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In the last newsletter Tom wrote that if after all the analysis you still don't feel comfortable with an investment, sell it. Well I've gotten to that point with FDP. After all the dividends were paid out my entry point was right around $25, so today I sold at a slight profit. That compares faborably to the money I would have lost had I invested in an index fund. However, if things look like they're improving or if Tom's review in two weeks is a glowing one that answers these concerns, I might consider coming back in.

Here are my concerns:

- With fuel price increases FDP is bound to be squeezed even further. Even if they hedge their bets on future fuel purchases that's still an additional cost. Although this has been a concern for some time now and the stock has recovered admirably, it's just not my cup of tea.


I don't understand. You mean their competitors don't use fuel? Their customers don't use fuel?

Y'know, if prices of a true luxury item keeps going up, the bottom half of customers for that item might in truth start disappearing. That's not the case here; not only is food not a luxury item, but the aging population in North America, Japan, and Europe all are trying to eat healthier more than they probably have in previous years. And in fact, since I consider this company above-average well-managed......with strong balance sheet, increasing synergies from good acquisitions, etc.........I think I could maintain they will weather any fuel price increases better than most of their competition, and their relative competitiveness will increase, not decrease (IMO).

- Pineapples and bananas aren't too high on the low-carb diets list. Thus, it's thus quite possible that the whole fresh-cut fruit trend may very well bypass the main staples of FDPs products.

I couldn't disagree more that this will have an overall significant negative impact; I think the fact the all the populations of the developing world are aging.....and all are trying to eat healthier, which means more real foods, more fresh, not less.......completely overwhelms those very few people who are on a true, strict low-carb diet and stick to it.
(And I'm one who has to; as a diabetic controlling his blood sugar by diet and exercise alone, without any drugs. Still can't understand why my HMO hasn't given me a discount for my good behavior, though; think their atta-boy letter got lost in the mail or something??!).

I'll tell you one thing that bothers me. The last conference call had a line of questioning from a knowledgeable but confused analyst probing why FDP's tax rates were so low (3% at the moment). Finally, after much prodding, he got out of FDP management that they aren't legally a US company---though they are based in Florida and over 50% of their business is in the US (though that percentage will likely decrease by the end of this year).

Saw an article the other day with the picture of a 3-story building in, what was it, Bermuda? That building is....officially....the legal domicile of over 14,000 US companies(!). It's nice for these guys to have a section of their website called Ethics; and they are fairly transparent, I think--in all other areas--of the business. But a company getting rich in the US by otherwise legitimate business practices that deliberately avoids paying its fair share as a 'good corporate citizen' of the upkeep for that country, for its defense, and whatnot, does not sit well with me.
I have, as yet, not stopped the regular monthly purchases I've had of FDP in my Buy & Hold account; but if given a choice of another company otherwise this well managed, that was a good citizen...versus this one....I probably would.

jp
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a company getting rich in the US by otherwise legitimate business practices that deliberately avoids paying its fair share as a 'good corporate citizen' of the upkeep for that country, for its defense, and whatnot, does not sit well with me.

Hi jp,

I'm sure you realize that current management had no say about where the company was incorporated. However, since they are in this financially advantageous position, why should they deliberately hurt themselves by moving to the US?

Consider the flip side. Should a US company earning significant money from foreign sales pay taxes in the foreign countries? If they do, then my argument falls flat, but I'm not sure they do or should.

Also consider those companies in the US paying taxes. Do they really pay their "fair share"? Or do they try to minimize those taxes as much as possible through various means?

Just a few early morning thoughts.

gebin
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I'm sure you realize that current management had no say about where the company was incorporated. However, since they are in this financially advantageous position, why should they deliberately hurt themselves by moving to the US?

Actually.....they've now had total say about where the company is incorporated for about 8 years now. Or is this very active, hands-on management, suddenly helpless when it happens to be an issue like this?

However, since they are in this financially advantageous position, why should they deliberately hurt themselves by moving to the US?


You mean, since corporations, like them, through political contributions and other ways, can keep these improper, almost anti-American corporate welfare benefits in place, why should they act responsibly?
Again....do you disagree that they should have a section on their website labelled 'ethics' at all? Doesn't applying ethics---instead of going purely for the gold, no holds barred--- 'hurt' them?

owever, since they are in this financially advantageous position, why should they deliberately hurt themselves by moving to the US?


I disagree that that is the flip side. This is a US corporation in all but the fine print. On their whole website I couldn't find any mention of Grand Cayman (nice place to scuba dive, by the way; though I lost a battle with some sea wasp jelly fish one night about 1100 pm......). Their executives live in the US; have their offices in the US; hold their conference calls from the US; work in US dollars; and are traded solely, I think, on an American exchange. This is not a company that just has some significant level of sales to the US.

Also consider those companies in the US paying taxes. Do they really pay their "fair share"? Or do they try to minimize those taxes as much as possible through various means?

Well, for that matter, I don't know whether you and I pay our 'fair share'. But, frankly, I tend to draw the line at saying I'm no longer an American; that I no longer have a responsibility to this country that's making me rich.

'Course, in my case, it would be nice if I were rich already so I could then decide but........well, we're working on it, right?

jp
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jp

(- Pineapples and bananas aren't too high on the low-carb diets list. Thus, it's thus quite possible that the whole fresh-cut fruit trend may very well bypass the main staples of FDPs products.

I couldn't disagree more that this will have an overall significant negative impact; I think the fact the all the populations of the developing world are aging.....and all are trying to eat healthier, which means more real foods, more fresh, not less.......completely overwhelms those very few people who are on a true, strict low-carb diet and stick to it.
(And I'm one who has to; as a diabetic controlling his blood sugar by diet and exercise alone, without any drugs. Still can't understand why my HMO hasn't given me a discount for my good behavior, though; think their atta-boy letter got lost in the mail or something??!).
)

I have a little input on this as well. The low-carb diet may be here for a longer hall (haul?) than some would have thought. And there is validity to a low carb. diet, it does work. It does work quickly in the beginning. Tests have been made between the low calorie and the low carb. diets and they both ultimately lead to the same results. If you graph or chart 2 groups of people (one group low cal. and the other group low carb.) they will both eventually meet about 6 months into their diets (Give or take a year and some change).

Looking at this in terms of long term, even the Atkin's diet teaches you to slowly introduce small quatities of carbs via fruits and vegetables, back into your diet, until you find your carb threshold limit. (Dr. Atkin's calls it something else but I forget, and the name is not what is important here, oh heck, hang on I'll find itE EK it is called the Atkin's Carbohydrate Equilibrium (ACE)).
So what we have is a company that is NOT a combatant with any low carb. diet. But a company that is in alignment with the low carb. diet.

Also, fresh fruit is not a trend. Saying fresh fruit is a trend is like saying that save the world is trendy, or (even slightly more obviously inaccurate) like saying that clean air is trendy. Fresh fruit is needed. Fresh fruit is good. Fresh fruit is not going away.

Foolishly

t.t.

"Water is the source of all life"
Company Gunny @ MCRD San Diego
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