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FDP: Fresh Del Monte Produce Inc -- research by eDealSeek.com on 2004/01/21

Fresh Del Monte Produce Inc. is primarily engaged in the worldwide sourcing,
transportation and marketing of fresh and fresh-cut produce. For the nine
months ended 9/26/03, revenues rose 19% to $1.91 billion. Net income before
acct. change rose 23% to $203.6 million.

Trailing P/E (ttm): 6.24 <--- PEERS HAVE 15
Forward P/E (fye 27-Dec-04)1: 7.03
PEG Ratio (5 yr expected)1: 0.69
Price/Sales (ttm): 0.61 <--- GREAT
Price/Book (mrq): 1.55 <--- SHOWS IT HAS GOOD VALUE
Enterprise Value/Revenue (ttm)3: 0.59
Enterprise Value/EBITDA (ttm)3: 4.83

Revenue (ttm): 2.40B
Revenue Per Share (ttm): 41.866
Revenue Growth (lfy)3: 8.40% <---- GREAT GROWTH
Gross Profit (ttm)2: 336.70M
EBITDA (ttm): 294.70M
Net Income Avl to Common (ttm): 238.80M

% Held by Insiders: 54.92%
% Held by Institutions: 37.24% <--- GREAT NUMBER, not too high, not too low

Short Ratio (as of 8-Dec-03): 11.912 <---- SHORT WILL BE SQUEEZED
Short % of Float (as of 8-Dec-03): 18.06%

Mean Recommendation (this week): 3.0 <--- an upgrade from last week
Mean Recommendation (last week): 3.4

Mean Target: 32.00 <--- GREAT, higher than 52 week high which is 29.

http://finance.yahoo.com/q/ae?s=FDP
Estimated earning for 2003 is 3.64 up from estimate a year ago which is
3.51. Positive Earning Surprise in the past 4 quarters, so we should expect
it earns more than 3.7 for 2003. The fact is for the first 3Qs, its numbers
all beat last year's. Q1:1.55, Q2:1.42, and Q3:0.60, total is 3.57. Q4 in 2002
is 0.61. If we assume Q4 in 2003 is the same as the last year's, then the total
earning this year is $4.2. All analyst estimates are not yet updated on YAHOO or
on MSN, they still use estimates range from $3.57 to $3.8 for 2003.
http://finance.yahoo.com/q/co?s=FDP
Competitor's PE is 20. http://finance.yahoo.com/q/ae?s=FDP
Industry's average PE is 15

This company has 81.8M cash and 48M debt, so the net cash is 33M. The tax free
dividend is $0.80 payable to share holders on Feb 09, 2004. Ford (symbol F)
pays 0.40 dividend, and its price is 16.4, comparing to Ford, FDP should be
priced at 2x16.4=$33. FDP's competitor's P/E ratio is 20+, while FDP's only
less than 7.

FDP's PE is only 7. If you use discounted model and assume its PE is 10, it
should be a $42 stock. FDP's industry is HOT too. US economy is getting
better. Several sectors will benefit from it: Telecom, Energy, Housing,
High End Items. When people get richer, they will spend more on
phones/internet, use more energy, buy bigger house, and buy expensive items.
2003's holiday's retail number already showed that: Wal-Mart and target are
doing bad, but high end stores are doing great.
FDP produce healthy high end food: fruits. FDP's sales will grow along with
a better stock market and better US economy.

Let's look what its report says:
"Net Sales. Net sales for the first nine months of 2003 were $1,908.1 million
compared with $1,603.1 million for the first nine months of 2002. The
increase in net sales of $305.0 million was attributable to higher net sales
of bananas and other fresh produce. Other fresh produce increased as a
result of the Standard acquisition combined with higher net sales of Del
Monte Gold pineapple and non-tropical products. Net sales of Del Monte Gold
pineapple increased due to higher sales volumes in all regions and higher
per unit sales prices in Europe and Asia Pacific. Net sales of non-tropical
products increased primarily due to higher per unit sales prices. Net sales
of bananas increased for the first nine months of 2003 due to higher per
unit sales prices in Europe and higher sales volumes in Asia Pacific,
partially offset by lower net sales in North America due to a decrease in
volume and a slight decrease in per unit sales prices.

"Gross Profit . Gross profit was $281.3 million for the first nine months of
2003 compared with $271.5 million for the same period in 2002. The increase
of $9.8 million was primarily attributable to sales of Del Monte Gold ?
pineapples and non-tropical fruit, as well as sales generated by
acquisitions. As a percentage of net sales, gross profit margin decreased to
15% in the first nine months of 2003 from 17% in the first nine months of
2002 primarily due to higher containerboard and transportation costs and the
shift in sales mix to high volume, high inventory turnover products from our
recent acquisitions.

"Interest Expense. Interest expense decreased $6.5 million to $5.9 million
for the first nine months of 2003 compared with $12.4 million for the first
nine months of 2002, primarily as a result of lower average debt balances.

Sales are up, costs are down, profits are up. Margin increases.

So why this stock is SO CHEAP? 2 reasons:

1 It had a past lawsuit. The company bribed Mexican officials to enter
Mexican markets, and they got caught. However, the lawsuit is dismissed on
Jan 20th http://biz.yahoo.com/djus/040120/1632001480_1.html

2 It had an antitrust lawsuit. That only shows this company is the leader in
this field. The lawsuit tries to block FDP from buy smaller companies. It is
a WIN WIN situation here. If FDP win, it will grow bigger so it will help
FDP in long run. If FDP lose, it will help the stock price in short run.

FDP has huge shorts, so a short squeeze is also expected when the price goes
up. Its 52 week high is 29, still short of the analyst price target 32 which
was issued months ago. I expect it will hit 35-37 range in near term, and up
to 40+ if technical indicators are good when it breaks new highs.

eDealSeek.com Stock Deal Dept has a STRONG BUY rating on this stock with
short term price target at 29, mid term price target at 35, and long term
target at 42. Since the ex-dividend date is Feb 09 2004, we recommend holding
its shares on that date. Since the dividend tax free law passed, most dividend
stocks are able to fill the gap left by the dividend, a good reason for
holding stocks with dividends now.