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A Sweet Opportunity?

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June 08, 2010 – Comments (7) | RELATED TICKERS: IPSU.DL

Pssst.  Want to see an ugly chart?  How about this one:

This is the three month performance of a company called Imperial Sugar (IPSU).  Imperial Sugar was absolutely hammered after its recent earnings release, dropping more than 40%.

I can't claim to have done any of the research for this idea on my own, I just came across it literally five minutes ago, but I like what I've read about the situation so far.

Many of the company's problems seem fixable.  While annoying, particularly for existing shareholders, Imperial's hedging losses are theoretically a one-time event.  Sugar prices should theoretically eventually improve.  The company's new plant is now operating much closer to full capacity than it was.

Look how cheap this company is relative to its book value.  IPSU closed today at $9.86/share...less than half of its $20 book value.  Sure book value is somewhat arbitrary because what is the book value for a sugar plant if prices don't recover, but that's a huge cushion.

Furthermore, it sounds like Imperial has a couple of new products in the works, including a mix with Stevia (my personal preferred artificial sweetener).

This is definitely an Interesting stock that warrants additional research.

Source: A Bargain Hunter's Dream: Imperial Sugar Goes on Sale

Deej

7 Comments – Post Your Own

#1) On June 08, 2010 at 8:45 PM, obsoleteaccount (< 20) wrote:

hmmmm, verrrry interesting, thanks for the tip

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#2) On June 08, 2010 at 9:09 PM, Robuh (24.50) wrote:

In America, first you get the sugar, then you get the power, then you get the women.

Video

 

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#3) On June 08, 2010 at 11:39 PM, 1315623493 wrote:

I have call options on SGG - BARCLAYS BANK PLC IPATH DJ UBS SUGAR TR ETN

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#4) On June 09, 2010 at 11:07 AM, obsoleteaccount (< 20) wrote:

Ok so I was excited to do my research on this company and came across this....look at the past earnings:

Q2 2008: Negative 59 cents per share

Q3 2008: Negative 79 cents per share

Q4 2008: Negative 44 cents per share

Q1 2009: 1 cent per share

Q2 2009: Negative 1.07 per share

Q3 2009: Negative 89 cents per share

Q4 2009: Negative 2 cents per share

Q1 2010: 14.84 per share (WTF?)

Q2 2010: Negative 2.39 per share

Q3 theyre estimated to earn 13 cents per share

How can you feel secure enough in a company with such crazy earnings all over the place?

Also, people think "sugar" is bad for you.  So they use substitute sweetners.  But they dont know theyre worse for you, so the demand for sugar in coming years will probably drop a little bit.

Plus they said that production on the rebuilt plant is slower than expected.

I would not put real money in this

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#5) On June 09, 2010 at 2:37 PM, 1315623493 wrote:

In my opinion, if you want to play sugar, I'd just stick with sugar itself, and not a sugar company like IPSU.

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#6) On June 10, 2010 at 4:32 AM, obsoleteaccount (< 20) wrote:

Thanks for the suggestion, I went to every local Costco and bought out every bag they have ;-P

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#7) On June 18, 2010 at 9:57 AM, mhonarvar (< 20) wrote:

rofl at comment #6

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