Dean Foods Company (DF)

has beat on earnings every quarter this year..
Estimated EPS for the year: 1.66
Making the Estimated PE 10.7
PEG for this stock is 1.27
Year over Year earnings are up...but the stock price is only up 4.7%

Very undervalued.

makers of the international delight and horizon organic

great company ethics

based on lower milk prices

Silk soymilk is the best of all the soymilks. I had to trace White Wave Foods back to Dean Foods. I like the organic aspect of the foods and the fact that the Silk soy milk production is entirely done with wind power. It's a green company. More and more people are going to turn to organic foods as time goes on.

Still need food...

This stock got crushed yesterday, and is off another 5% today. While the earnings release provided lackluster guidance and distribution costs rose, there is a gem within the ruble. "Net sales of Horizon Organic milk increased nearly 20% over the year ago period due to higher realized pricing, continued expanded distribution and differentiated innovation." Over the next couple of years organic products will continue to experience increased demand, and Dean Foods is capitalizing on this trend. Also, a rather defensive play is always a good long term bet in this type of market.

This company is reducing debt and expenses way ahead of schedule. It is the market leader for its product. Market pressures on the expense side are falling (fuel and grain). When the market gurus and the market finally catch on this stock will be traded near 45 a share. Hope you do not miss out.

Positive outlook for future sales.

Dean foods dairy group maks this stablle play, as far aswhitewave need more info. Ill give them short out perform on chart.

Milk distribution costs will continue to eat at profits. Deans plants are running at full tilt. Debt to equity ratio means that a rise in interest rates will adversely affect profits. Expanding sales to Costco, WalMart and Sam's Clubs means even tighter margins.

RISE IN 2ND QUARTER STOCK IS MOVING UPWARD

Here we have American's leading milk company and fuel costs have a stranglehold. From the fuel costs passed on to the company from farmers supplying raw milk through to the cost of getting processed milk to market. Barring a Presidential price freeze on gasoline, this company has tough times ahead, no matter how good their plan to deal with cost containment by becoming efficient.

We are entering a period of time in history where people will begin to make their homes their "RESTAURANTS" which will give this stock a burst of energy like never before experienced. NEW PRODUCTS for the "at home chef".

This company will be brought out before the years is over.

It is a leader and with the market the way it is people will want to save on food

GOOD TURNAROUND STOCK GOOD FUTURE

http://stockmarketbeat.com/blog1/2008/03/03/df-if-management-at-dean-foods-cant-figure-out-their-industry-no-way-am-i-going-to-try/

Dean has managed to get itself on the wrong side of every dairy-related position (so much for Peter Lynch’s invest in what you know theory.) For example, the company describes the current dairy environment in its latest 10Q: “As a consequence of higher raw milk costs, we have seen a related increase in shrink costs and reduced profits from excess cream sales. At the same time, sales volumes in the Dairy Group have softened as consumers react to the higher retail prices. We are also seeing a shift from our branded fluid milk products to private label products resulting in reduced gross profit. In our White Wave segment, results continue to be negatively impacted by the oversupply of organic milk.”

High commodity costs during a period of oversupply? It is as if the law of supply and demand has been overturned. And Dean doesn’t expect to see much improvement. “As we look beyond the first quarter, we find it difficult to have much confidence in current dairy commodity forecasts given these unprecedented levels of dairy commodity market instability,” management warned.

As a result of this lack of confidence, the consensus earnings estimate for 2008 has dropped from $1.45 to $1.33 over the last month. The Zacks rank, a measure of earnings momentum, has fallen two points to the worst level of five. That rank puts Dean among the worst 5% of companies followed on the basis of earnings momentum. Yet still the estimates are well above management’s own guidance for “at least $1.20 per share.”

If there is a bright side to Dean’s horrible earnings outlook, it is that the quality of earnings remains relatively sound. The accrual ratio, which represents the difference between cash earnings and accounting earnings, should ideally hover around zero. That is more or less what Dean’s has done.

The P/E of 20x management’s guidance is above the company’s five-year average of 17.5x. And even being willing to look way ahead, assuming the current consensus estimate of $1.76 for 2009 doesn’t get cut and that investors are willing to pay the average multiple for them, the target price would be about $30. The potential 25% gain over 1-2 years curdles when it has to be based on so many assumptions.

The consensus five-year growth rate of 11.5% also seems incredibly optimistic, given that the same analysts are expecting a 5% sales increase this year to be followed by a modest decline next year. And even assuming the 11.5% growth occurs due to margin expansion, I’d expect much of it to be eroded by a contracting valuation given Dean’s outlandish 63x price/book ratio. Considering that total return is a function of growth and the change in valuation, I think the two would offset each other in this case, perhaps resulting in annual total return in the mid single digits.