Seaboard Corp (NYSEMKT:SEB)

CAPS Rating: 4 out of 5

A diversified international agribusiness and transportation company which primarily engaged in pork production and processing and ocean transportation.

Caps

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All Players

248 Outperform
21 Underperform
 

All-Star Players

52 Outperform
4 Underperform
 

Wall Street

1 Outperform
0 Underperform
 

Top SEB Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

beppaun (55.81)
Submitted October 02, 2014

Low price to tangible book for a serial tangible grower

brabinger (42.57)
Submitted September 18, 2008

I hate stocks that are opaque and Seaboard certainly qualifies. Few management teams take a more scornful view of their investors than this one. They provide only the most minimal information on their performance, and even their SEC filings are less… More

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Recent Community Commentary

Read the most recent pitches from players about SEB.

Recs

0
Member Avatar wax (< 20) Submitted: 7/9/2018 5:31:34 AM : Underperform Start Price: $3,969.32 SEB Score: +7.89

Seaboard Corporation
Seaboard Corporation is a diverse agribusiness and transportation company with operations in pork production, turkey operations, commodity merchandising, grain processing, sugar production, electric power generation, ocean transportation. Industry peers include Smithfield Foods, Bunge Limited, and Louis Dreyfus Holding BV.

Short-Term Value
My short-term (3-6 week hold) target price for the stock is $4350.27, with an initial trailing stop at $3900.57. Upward price movement will find resistance at $4008 and $4096, with final resistance at $4175. Downward price movement will find support at $3922 and $3776.

Days to Cover
The most recent days to cover number is 8. The days to cover number is a measurement of the company’s outstanding shares that are currently shorted, expressed as the number of days required to close out all the short positions. The number is determined by dividing the number of outstanding shares currently shorted by the average daily volume. The days to cover number is sometimes used as a volatility precursor for a stock.

The Tax Act
The Tax Cuts and Jobs Act of 2017 makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) requiring companies to pay a one-time deemed repatriation transition tax (the “Transition Tax”) on certain earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate alternative minimum tax (“AMT”) and changing how AMT credits can be realized; (6) capital expensing; (7) eliminating the deduction on U.S. manufacturing activities; and (8) creating new limitations on deductible interest expense and executive compensation.

The Securities Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) 118 which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

It is important to note that income tax adjustments applied to repatriated earnings and deferred taxes, may distort a companies earnings and consequently its fair value.

In the case of Seaboard Corporation, the company has recognized the provisional tax impacts related to mandatory deemed repatriated earnings and the revaluation of deferred tax assets and liabilities in the amount of $112 million.

In addition, beginning in fiscal 2018, the 2017 Tax Act also imposes two new U.S. tax base erosion provisions, the global intangible low-taxed income (“GILTI”) provision and the base-erosion and anti-abuse tax (“BEAT”) provision. The company will account for the GILTI and BEAT taxes in the period incurred, and therefore has not provided any deferred tax impacts in its consolidated financial statements for the year ended December 31, 2017.

Note that for fiscal 2017, 0% of net income came from income tax benefits.

Insider Transactions
In the past 12 months, the company has reported 1 insider trades involving 25 shares of stock. Of that 1 insider trades, 0 were Buys involving 0 shares of stock, and 1 were Sells involving 25 shares of stock, creating an insider buy to sell ratio of 0.0 to 1.

Mergers/Acquisitions
In August 2017, Seaboard’s Pork segment acquired hog inventory and hog farms in the Central U.S. from New Fashion Pork, LLP for total cash consideration of $40 million.

Divestitures/Dispositions
There were no divestitures or dispositions during fiscal 2017.

Year-Over-Year
Several year over year metrics of interest are revenue growth, free cash flow growth, earnings growth, debt growth, price growth, and year to date price growth. For Seaboard Corporation, revenue increased by 8%, earnings decreased by 72%, free cash flow decreased by 104%, total debt increased by 9%, and the stock price increased by 10%. Year to date the stock price is down 10%.

Future Value
My future (5 year hold) target price for the stock is $6767, which is an average annual return of 14%. A prior five year hold of the stock (FY2013- FY2017) would have returned an average of 15% per year. Past and future gains are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Any investment has the potential for loss, and past performance is no guarantee of future results.

Baseline and Fair Value
As an on-going concern, my baseline valuation for the company is $720. Baseline valuations are based on free cash flow value, net current asset value, book value, and tangible book value. My current fair value for the stock is $322. The fair value number is my current valuation for a stock based on earnings, earnings growth, and the current 5-year yield of a AAA rated corporate bond. Value investing buy, sell, and close targets are derivatives of fair value.

Value Considerations
Other value considerations include the PE Ratio, the PEG Ratio, Book Value, Tangible Book Value, Price to Book, and Price to Tangible Book. For Seaboard Corporation the PE Ratio is 122, the PEG Ratio is 8.4, Book Value is $2910, Tangible Book Value is $2892, the Price to Book Ratio is 1 and the Price to Tangible Book Ratio is 1.

Fair Warning
Fair warning means that the time for bidding has ended and an exchange is about to be concluded. Seaboard Corporation (NYSE: SEB) – FYE 12/2017 – OVER VALUED The stock is currently trading at levels above with my most recent $515 close target. Please See Linked PDF Worksheet

Disclosure
I hold no shares of Seaboard Corporation
Posted on 07/09/18

Recs

0
Member Avatar AnsgarJohn (98.71) Submitted: 4/16/2015 6:31:27 PM : Outperform Start Price: $3,599.94 SEB Score: -30.21

Nice dip

Recs

2
Member Avatar beppaun (55.81) Submitted: 10/2/2014 2:40:16 PM : Outperform Start Price: $2,604.90 SEB Score: -1.93

Low price to tangible book for a serial tangible grower

Leaderboard

Find the members with the highest scoring picks in SEB.

Score Leader

cbixel

cbixel (< 20) Score: +134.86

The Score Leader is the player with the highest score across all their picks in SEB.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
peaksanddips 88.30 10/13/2008 Outperform NS $960.40 +269.64% +192.30% +77.34 0 Comment
TheOneUp < 20 12/11/2008 12/19/2009 Outperform 3Y $934.55 +279.86% +204.88% +74.98 0 Comment
anylawn 48.19 10/5/2006 Outperform 5Y $1,245.49 +186.00% +112.87% +73.12 1 Comment
TheTaxShelter 94.41 9/26/2006 Outperform 3M $1,238.12 +187.70% +115.50% +72.20 1 Comment
absolutsmitts 88.16 9/25/2008 Outperform NS $1,182.94 +200.10% +128.08% +72.02 0 Comment
rijoker 94.94 9/3/2008 6/16/2015 Outperform 3Y $1,233.88 +187.71% +116.76% +70.95 0 Comment
NickTX 24.96 5/7/2009 Outperform 3Y $981.34 +261.75% +193.74% +68.01 0 Comment
santasingh < 20 10/9/2006 Outperform 3Y $1,273.93 +179.61% +112.84% +66.78 0 Comment
CrewManiac85 < 20 9/4/2008 Outperform NS $1,243.71 +185.44% +118.74% +66.69 0 Comment
PAINT48 21.09 12/15/2008 Outperform 3Y $942.42 +276.69% +210.21% +66.48 0 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
TrackJefferies 80.66 7/13/2007 Outperform NS $2,331.64 +52.77% +84.25% -31.48 0 Comment

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