Sanderson Farms, Inc. (NASDAQ:SAFM)

CAPS Rating: 5 out of 5

A fully-integrated poultry processing company engaged in the production, processing, marketing and distribution of fresh and frozen chicken products.

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Member Avatar AlbertAi (36.03) Submitted: 11/4/2015 2:35:28 PM : Outperform Start Price: $71.14 SAFM Score: +24.06

This stock has gotten absolutely murdered by short sellers over poultry scares. The reality is they're very strong fundamentally and are grossly undervalued right now.

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Member Avatar thequast (93.21) Submitted: 10/12/2015 8:23:02 PM : Outperform Start Price: $68.53 SAFM Score: +23.98

One of the factors Buffett considers when buying a stock is "will the product be used as much in the future as it is today...does the product have longevity?" Being a virtual pure play on chicken, I'd say Sanderson Farm will be doing business in 20 years much like it is doing business today.

Low valuation, great cash position, and beaten down stock are factors to choose this business as a market beater.

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Member Avatar jimhsu (66.47) Submitted: 5/20/2015 11:16:27 PM : Outperform Start Price: $81.87 SAFM Score: +10.12

Conservatively managed poultry company on fire sale due to the avian flu scare and bear raids by shorts.

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Member Avatar elks42 (25.75) Submitted: 4/21/2015 4:02:13 PM : Outperform Start Price: $76.39 SAFM Score: +16.02

This stock has been beat to death by the shorts. According to Factset, it's at 18.7 days to cover with 44.85% of the float shorted. Insiders have been increasing their long positions over the past 6 months, with 11.8% of shares outstanding owned by insiders. If you strip out the Employee Stock Ownership Plan/Trust, you still have 4.9% inside ownership, so insiders have a decent amount of skin in the game. Basically, the shorts are betting that the avian flu jumps from the turkey farms to the chicken farms and has a huge impact on the flock (A very real threat, but right now this thing is trading as if its flocks already had the avian flu).

Using very conservative estimates and the SAFM WACC as my discount rate, I come up with a fair value north of $102 using a DCF. Using analyst estimates as of mid-March, again using the SAFM WACC as the discount rate, I get a FV north of $110.

This is a consumer staple that will continue to be a regular part of the diet of Americans. The company itself is run well and continues to grow. All it will take with the current short interest is one well-known name to take a decent position (Buffett likes staples, but really any big-name investor) and this stock will soar as the shorts scramble to cover. I'm long and will continue to add on any weakness.

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Member Avatar JBear (49.39) Submitted: 3/26/2015 12:24:14 PM : Outperform Start Price: $76.67 SAFM Score: +13.67

Definitely undervalued. A well-run company in a steady business. We will always need chicken, no matter what economy we are in. P/E rate is solid.

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Member Avatar BoomerBull (78.64) Submitted: 2/21/2015 4:26:58 PM : Outperform Start Price: $82.54 SAFM Score: +8.58

No debt, high earnings yield, 0.8 PEG, low P/E, and 30% ROIC. Eat mo' chickin!

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Member Avatar AnsgarJohn (96.81) Submitted: 1/28/2015 4:08:24 PM : Outperform Start Price: $80.53 SAFM Score: +6.32

GARP Peter Lynch Screen.

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Member Avatar Handworn (48.88) Submitted: 9/14/2014 8:52:39 PM : Outperform Start Price: $86.50 SAFM Score: -1.16

High ROE and almost no debt-- they're doing something right.

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Member Avatar Kenji94 (47.46) Submitted: 9/14/2014 11:11:12 AM : Outperform Start Price: $86.50 SAFM Score: -1.16

Small growth company trading at a discount price.

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Member Avatar asilverp (70.37) Submitted: 8/28/2014 1:31:55 PM : Outperform Start Price: $91.48 SAFM Score: -5.78

statistically speakly, relatively safe.

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Member Avatar chris293 (34.11) Submitted: 2/18/2014 1:12:30 PM : Outperform Start Price: $71.43 SAFM Score: +10.95

A well know company.

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Member Avatar stuerenburg (< 20) Submitted: 1/11/2014 3:36:25 AM : Outperform Start Price: $71.33 SAFM Score: +10.73

value

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Member Avatar PlayDumb (90.99) Submitted: 10/4/2010 4:09:56 PM : Outperform Start Price: $39.26 SAFM Score: +41.65

market is negative about short term prospects, but longer term a safe bet

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Member Avatar thebamoor (37.15) Submitted: 6/4/2010 3:53:00 PM : Outperform Start Price: $48.94 SAFM Score: -11.18

SuperSimple

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Member Avatar michaelbon (< 20) Submitted: 8/25/2009 11:04:50 AM : Outperform Start Price: $37.70 SAFM Score: +31.56

Improved market conditions for industry should continue into 2010. Very good 5 yr EPS Growth projection of 9%.
Current PE of 10.5 well below peer group average of 16.4

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Member Avatar oncqueen (68.70) Submitted: 8/28/2008 11:29:09 AM : Outperform Start Price: $30.99 SAFM Score: +110.47

Can't afford steak? " Let them eat chicken."

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Member Avatar davidova (< 20) Submitted: 5/23/2008 7:53:42 AM : Outperform Start Price: $42.75 SAFM Score: +48.37

s

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Member Avatar Windkissed (< 20) Submitted: 4/24/2008 10:30:13 PM : Outperform Start Price: $37.35 SAFM Score: +76.10

Will outperform during the summer and into early fall

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Member Avatar tupperjack (37.11) Submitted: 3/31/2008 8:06:06 PM : Outperform Start Price: $34.44 SAFM Score: +88.29

with rising fuel pricess chicken will again become the meat of choice

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Member Avatar mhamp (55.96) Submitted: 3/26/2008 4:30:59 PM : Outperform Start Price: $34.94 SAFM Score: +85.52

FORGOTTEN COMMODITIES

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