Imperial Sugar Company (IPSU)

Sugar prices are rising but demand is not slowing down nor will it anytime soon. Sugar is a staple all over the world. PE of 10 makes the price very sweet!

Sugar prices are going up.

Following translator 999 with this one.

Can't get enough sugar!

Mmm...sugar...

Commodity / Sugar

IPSU's market cap of $110 million is a joke. The company has zero debt and $50 million in cash. IPSU is expected to receive as much as $350 million of insurance proceeds to rebuild its damaged plant and compensation for business lost due to its refinery explosion and subsequent shutdown. The company owns 50% of Wholesome Sweetners as well as a 50% joint venture with a mexican sugar producer. The company is in talks with Cargill to partner on a new refinery plant. Cargill or ADM are prime suitors that could acquire it.

top 20 stocks to sell (10/6/08 LN)

Commodities like sugar are going up in 2009.

SELL SELL SELLL

The demand for 2008 & 2009 sugar exceeds current and new crop levels. Prices for sugar's competing product, high fructose corn syrup, will also be rising, once again, for 2009 contracts. When Imperial completes the resurrection of the GA plant they will have the most modern and efficient plant in the industry. All the above favorable developments for improved margins and an increasing stock price.

With corn wiped out in the midwest, this company is poised to increase market share when corn syrup is too costly.

Eventually it will go back up. Be patient and this will pay off in the long run. Buy low sell high.

Commodities, Commodities, Commodities! Alternative fuel sources (ethanol) should drive the price upward.

Recovery from the plant explosion last year should result in a recovery of share value as margins expand.

VALUE!

In a bad year, these guys make about $15 million. In '07 they made $40 million; in '06 they made $50 million. It all depends on sugar prices, which are low right now. But given IPSU market cap of $162 million right now, it's a steal.

Plus they've got a tremendous balance sheet. Current assets - TOTAL liabilities = $66 million

The reason we're being offered this deal of a lifetime is that they had an explosion at one of their sugar refineries. This has reduced their capacity while forcing them to spend making repairs, so current earnings are negative. But when their insurance starts reimbursing them for the repairs they're doing (something around $170 million, I believe), earnings, cash flow and book value will all shoot way up.

And all of the above ignores the fact that IPSU is the only cheap commodity play around anymore. Their profits are based on a percentage of the selling price of sugar, which is cheap now. But with energy prices up, fertilizer prices up, corn prices up, I figure sugar has to go up too. (If corn prices make high fructose corn syrup too pricey, companies could switch to sugar. If high corn prices make sugar beet planting unappealing, farmers will switch over, dropping sugar supplies.) I don't know exactly how it happens, but it looks likely to me.

statsgeek and seems to bottom out.

Sugar. Sugar. Sugar. Let's do the math.

I had them as an outperform, and was doing well right before the refinery accident. Obviously I dumped them just before the price completely crashed. Saw statsgeek pick them up, and they are still in great shape for growth.