- Sanderson Farms, Inc. is relatively cheap compared to peers like Tyson, Pilgrims, and Hormel. It has very pragmatic management that seems very focused on maximizing long-term value.
- SAFM stands to benefit from inflationary pressures on food staples.
- SAFM makes the most sense as an acquisition target in this industry due to its consistent cash flow, clear financial disclosures, and low debt.
- An optimized capital structure for SAFM would further increase free cash flow.
- SAFM’s biggest risk is that it does not hedge feed costs.
For further details see:
Sanderson Farms Is A Value Play Right Now