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You can't go wrong with food stocks

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December 09, 2009 – Comments (5) | RELATED TICKERS: CMFO

When I mentioned CMFO back at $5+ , I said you can't go wrong with food. Now look at the new play I have at $6.96 YUII -- YUII Net revenue increased 37.4% to $13.2 million, compared to $9.6 million
in the third quarter of 2008
-- Gross profit margin expanded 1,290 basis points to 39.1%, compared to
26.2% million in the same period last year
-- Operating income grew 166.1% to $4.3 million, compared to $1.6 million
in the third quarter of 2008
-- Net income increased 114.8% to $4.1 million, compared to $1.9 million
in the same period last year
-- Fully diluted EPS grew 116.6% to $0.26 per share, compared to $0.12 in
the third quarter of 2008

"The third quarter of 2009 was another very successful quarter," commented Mr. Zhentao Gao, Chief Executive Officer of Yuhe International. "We achieved record quarterly revenue and net income, owing to our capacity expansion and stable customer relationships. Selling prices began to recover sequentially in the third quarter; the average selling price per day-old broiler increased to RMB 2.85 in the third quarter from RMB 2.38 in the second quarter. Given our business momentum, we are confident that demand for high-quality day-old broilers will remain strong in the fourth quarter of the year."

5 Comments – Post Your Own

#1) On December 09, 2009 at 11:51 AM, hhasia (65.98) wrote:

Seems like GS agrees. Food stock at the ground level.  When a famine comes, look who owns the supply chain. Be afraid, be very afraid.  (2008 article)

http://www.naturalnews.com/023918_poultry_poultry_farms_china.html

 (NaturalNews) Corporate ownership of world food sources may be shifting into high gear. Goldman Sachs, the private equity investment bank of the ultra wealthy and powerful, has announced that it's in the race to scoop up assets related to food production. Its latest investment is $300 million in Chinese chicken farms.

U.S. based Goldman recently announced it has acquired full ownership of 10 poultry farms on the mainland of China for $300 million, according to Frederick Yeung, reporter for South China Morning Post. The farms are in the Hunan and Fuijan provinces. This move helps fortify Goldman's position in the mainland livestock industry.

Although Goldman bought the farms outright, they will not be involved in their daily operations which are to be outsourced to third parties. According to Yeung, the investment bank will maintain control of the livestock prices.

The purchase is seen by many as yet another rapacious move by big money to take control of the assets of the underprivileged. It comes on the heels of the collapse of World Trade Organization talks aimed at leveling the trading field and taking steps to protect the trade interests of the third world countries who seek to trade their agricultural products to the first world countries in return for other goods. The talks fell apart when the wealthier countries refused to compromise their agricultural subsidies.

The Chinese are showing themselves to be respectful of their farmers. The People's Bank of China has recently raised its commercial bank loan allocations to support small farmers and their workers.

In 2006, Goldman won a bid to purchase a 100 percent stake in meat and poultry group Henan Shuanghui but the deal later ran into trouble with the Chinese government who want to maintain tight control over foreign investment in the assets of the country. Goldman already holds a 13 percent stake in China Yurun Food Group, the country's second meat and poultry processor whose profits are surging.

The entrance of the investment banking company into commodity ownership comes at a time when investors' enthusiasm for commodities is cooling. Many commodity indices are experiencing corrections of 15 percent or more from their all time highs earlier this summer. The commodity price correction has most notably shown itself in lower gasoline prices. Goldman's latest purchase suggests that this correction could be short lived.

Goldman Sachs provides a range of investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. It is considered the premier investment house on Wall Street and the representative of the 'smart money'. Goldman Sachs is a public company whose shares trade on the New York Stock Exchange.

Investment guru and former hedge fund manager Jim Rogers says the most valuable investments on the mainland of China are its agricultural products. Rogers was one of the first to predict the bull market in commodities that began at the turn of the century. He sees commodity investments by the super rich as continuing for many years to come. Rogers has a history as a knowledgeable citizen of the world. He and has his family have become recent ex-patriots to mainland China, since that's where he sees the action for the foreseeable future. His books on investing in commodities are available from Amazon and others.

 

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#2) On December 09, 2009 at 12:30 PM, JaysRage (88.77) wrote:

I agree.    I own YUII in my real life portfolio.   There has been a little bit of larger purchasing going on in the last week.  I think the company has gotten the attention of some larger buyers.  

Great company with a great growth model with leading-edge processes and technology that is rapidly increasing their market share in an under-supplied market in need of a consolidator.   

There are other food China plays that I'm investigating right now.   There are some other good ones, but in terms of the right company at the right price, YUII is still right on top.  

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#3) On December 09, 2009 at 4:04 PM, caidencollett07 (28.89) wrote:

I Like It!!!

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#4) On January 09, 2010 at 5:05 PM, glide95 (< 20) wrote:

CMFO down 4% for day, and down 30% AFTER HOURS!  What happened?

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#5) On January 09, 2010 at 5:09 PM, glide95 (< 20) wrote:

YUII down 38% AFTER HOURS!   What's going on with YUII and CMFO?

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