Del Monte Foods Company (DLM)

Del Monte sits in the $11 range +/- $1 for long periods of time, and then drops occasionally. It is a good stock to pick up on these dips, but doesn't seem to grow long term. I just sold the stock after picking it up a year ago below $6. I'll be watching for another dip, but it will probably take some time. I just don't feel too worried about finding something else to outperform it until it drops.

Low PE. Basic stuff

CANNED FOOD BUY OUT CANDIDATE......THEIR STOCK HAS BEEN SWIMMING AT THE $10 LEVEL FOR 10 YEARS.....ITS TIME TO BREAK OUT....AND THE EARNINGS HAVE BEEN POSITIVE IN A DOWN MARKET.

Good earnings.

investorplace and msn highly rated

While I do like DLM as a company, its proximity to its 52 week high, the amount of debt that the company is working with and how it is leveraged, leads me to believe that DLM is not a long-term growth stock, but rather a steady hold value (especially given its dividends, reinvested).

Not necessarily overvalued, but certainly not cheap any more at these levels. It would've been a great buy back in December at $5, but at $9.25, I'm not sure how much upside it has left.

DLM is highly levered. If you ignore the large amount of goodwill on their balance sheet, they have almost no equity when compared to liabilities. Their intangible assets account is likewise very large and mostly consists of the value of their trademark. I won't deny that the Del Monte name has value.

However, from my perspective, the value of trademarks for purposes of a DCF analysis are debatable. What gives the trademark value? Is it the company's cash flows? Or is the company's reputation so great, that even if the company were teetering on the verge of bankruptcy, it would still have value? For Del Monte, I think the answer is a little bit of both. I'd discount their intangibles a little bit, but not much for my analysis (since I'm going red thumb). After that discount, I think you can basically say that Del Monte has 0 equity and their value is totally dependent on the present value of their future cash flows.

Diluted earnings from continuing operations for Del Monte over the past three fiscal years: $0.74, $0.58, and $0.48. Actual earnings have been higher due to discontinued operations. I'd estimate future cash flows to be somewhere between 60 cents per share and $1 per share with a 3% constant growth rate. That gives Del Monte a valuation somewhere between $8 and $14 on my spreadsheet. If I had to take a guess, I'd say this was worth about $10. That's a little bit higher than what it's selling for right now, but not much. Given the huge discounts the market has been putting on equities during the downturn, I'll wager to guess this will underperform the market.

Of course, you might just take all the above as a minor justification of my real reason for red thumbing this: high insider selling.

The food stamps via the stimulus plan will make the food sector the land of milk and honey for traders. Literally.

people eat more at home and will buy more del monte products. Also profitable and lots of cash

This was my first long term pick when I started investing again in December. It may be the last stock I sell in the portfolio. Good steady growth, and almost guaranteed to always be there for me.

DLM in my long term holdings and a market leader in packaged fruit and vegetables. DLM has a very low PE and high growth. Company has had consistent dividend, although it's on the smaller end for longterm holding.

Del Monte has a good business plan and a solid management team. DLM is a great value for the longterm investor.

I want DLM in my long term holdings. DLM is a value play. They have
simple products and are market leaders in those products. The
management team is effective.

DLM makes premium packaged fruit and vegetables, dog food and cat
food. They showed in 2008 that they could raise prices as their costs
went up. Their low PE ratio, high growth and fair dividend mark them
as a value play.

Del Monte makes premium packaged fruits and vegetables. Judging by my
local store they are one of two in this space. The other, Dole, has
higher prices for what appears to be identical items. Del Monte's
Milk Bone and Meow Mix brands are market leaders. Del Monte tries to
be best in class wherever they compete.

This management team has managed the business well. When they found
themselves unable to grow Star-Kist they sold it off. They have
aggressively cut costs across the business lines. They responded
quickly to the rise in commodity prices in 2008.

I have been a believer in Del Monte. Their small size and effective
management provides an unusual opportunity for growth. I continue to
own shares in the company. Del Monte is a great value for the buy and
hold investor.

New WTO rules

Currently sellling under book value. The Price/Book is .95 as of April 30, 2009

Good stock to feed off of

1. More people are preparing food at home. DM is a classic brand name, I think people would choose this over a generic/store brand or higher priced premium brand.

2. Shipping costs are down.

3. Could see a breakout if it passes 200 day MA

Margins on Del Monte products were helped by price increases put through to offset soaring commodity costs over the last year. Now that prices for many ingredients have fallen, the benefit of keeping prices high is even greater.

Meanwhile. store brands are gaining market share because they were quick to pass cost savings on to their customers.

Time to accumulate.

Del Monte Foods? Go out into your pantry and look at the canned goods. Dimes to doughnuts you've got some of their products. Times may be hard, (Jan 09), but folks gotta eat. There's nothing spectacular here, but DLM is a safe bet in shaky times.