![]() ![]() The current price of 0,13 PHP can therefore only be explained by a turn-around scenario. SFI is undervalued at a PE of 2.5 compared to a mean PE of 100 of the Philippine SE All Share Index but heavily overvalued by all other valuation methods. This is due to an increase in the interest income. In FY 2019, the company has reported an operating profit margin of 189% and a net profit margin of 140%. SFI has reported and average of -4% operating and -7% net profit margin for FY 2014 to 2018. The operating and net profit margin however have been less stable. Swift Foods Inc has a track record of being cash-flow negative with no investments in expanding or renewing the business since 2014.Ĭoncerning the margin stability, the company has averaged a 9% gross profit margin for FY 2014 to 2019 with a standard deviation of 4%. SFI has had an asset contraction of average 6% YoY from 2010 to 2019. The company operates on negative working capital and has a current ratio of 0,4. SFI has continuously reduced the long-term debt and presently has no long-term debt to service. Assuming the two companies’ revenue as the market size, Swift Foods Inc is down to 27% in 2019 compared to 38% in 2015. However, the company has steadily lost market share to its public counterpart Vitarich Corp (VITA). The industry competition for SFI is limited in terms of sizeable direct industry competitors. This signifies the price pressure in the sector that is partially due to imports from highly mechanised competition abroad. The price for poultry has increased 2,5% YoY on average since 2010, compared to an inflation of 3%. The expansionary state is therefore likely to continue. However, considering a growth rate of 3% it would still take the Philippines more than 30 years to reach a poultry consumption that would be comparable to the USA. As the purchasing power of Filipinos rise, the preferences for chicken are likely to be substituted by other meats such as beef and veal. The poultry consumption in the Philippines has constantly risen in the past with an average YoY growth of 5% in the last ten years and 2% in the last two years. As per the latest information, the company operates out of 10 branches. The agribusiness consists of producing and selling live and processed chicken. The meat business is now part of RFM and SFI today is solely dedicated to the agribusiness. SFI came into existence in 1994 in Mandaluyong City and was originally a two-pillar company consisting of the agribusiness and sale of processed meat. Swift Foods Inc (SFI), the stock is not related to these products anymore. The preference for corned beef and sausages should however not drive your investment decisions. Swift Foods is a brand that may ring a bell, especially if you live in the Philippines and processed meat products regularly find the way into your shopping basket. I am posting the full text here but if you like it consider to visit my blog. I have published a short analysis on why or why not you should invest in Swift Foods Inc (SFI). ![]()
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