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I have a problem of a different sort. I have been studying my butt off with all of this stock research. I feel like I am understanding more and more but not comfortable yet as I haven't really paper traded anything and haven't really spent any money but I know in time that will come and that's okay. Like you said, the market isn't going anywhere. And, for once in my life I feel I have actually been quite patient and okay with it as that is how you teach it and it makes sense to me. Plus, I also have not lost any money. Rule #1 rocks .
Some guy calls Jerry (my husband) on the phone from S_____ (broker), telling him he can't lose any money or at least not much, talks to him for probably 10 - 15 minutes and has Jerry spending $20,000 on FDP (Fresh Del Monte produce). When I found this out I could have killed him. pt malindo feedmill I asked him why he felt the need to do that. pt malindo feedmill He said to make a lot of money. I'm thinking if it sounds to good to be true, more than likely it is.
I researched pt malindo feedmill this company , I don't like the sound of the CEO (sounds shady) and to be honest, I didn't give Jerry much of a chance to explain anything as I was so mad. He can talk to a guy he doesn't know from Adam for 15 minutes and throw him $20,000. I (his wife of 21 years, lets see if we can make it to 22) can research my butt off and try to do this the way I feel and also the way I thought he felt, is a safe yet profitable way, and where does it get me? And even if the company does make a lot of money, just reading about the guy was giving me the creeps and it wouldn't have been a company I would feel comfortable investing in and I told him so. Remember, it needs to be YUMMMMY . FDP's numbers are awful. Not a Rule #1 investment at all. I think I am going to go crazy.
Since pt malindo feedmill I've been divorced twice I don't think I'm real qualified to help you find the right answer to your issues with your husband, except to say that two heads are often better than one, especially when they love each other.
But I can look at FDP and give you my opinion for what it's worth. And my disclaimer here is that I am a river guide, I have a license to row the Grand Canyon, to drive a car, to fly a plane, and that's it. So for what it's worth here's how I see FDP :
I want to know whether I can put a value on this business at all. Is it predictable enough to be able to make an educated guess about the future? Let's start with the Big Five Numbers : ROIC : Long term it looks good -- above 10%, but big red flag on the latest ROIC numbers at 7%. This is a sign of trouble. The CEO is having trouble making a decent return on the owner's equity and whatever he can borrow. Red Flag #1. Sales Growth Rate : Not bad at all. Consistent. Roughly 12%. EPS Growth Rate : Whoa. Now that's some ugly stuff right there! It's totally inconsistent and over the last 3 years its dropping like a brick. They are selling, but their costs are killing them. BIG red flag. Equity growth rate : WOW. Stellar! 24% roughly per year and totally consistent for ten years. Except that seems weird with the terrible earnings growth.
So I dug deeper and noticed that Current Assets [see Balance Sheet ] were keeping up with all that great equity growth. So I clicked on the SEC docs and discovered since 1996, Del Monte is a foreign business. Turns out they are a Cayman Island business with wholly owned subsidiaries in a whole bunch of different countries around the world.
Further turns out that the CEO/Chairman and three of the six directors are all members of the Abu-Ghazaleh family from Dubai, UAR and that this family owns 52% of the stock -- and therefore totally controls the business and the board of directors. To ensure things stay that way, they put in place "anti-takeover agreements" to avoid being kicked out without a huge payoff.
Among the gems in the filing is the fact that these guys are paying out 3.5% of net income to themselves as a bonus. Which they got in spite of the fact that earnings dropped like a stone . And on top of that they awarded themselves a nice $3 million in stock options. 15 officers got most of the $10 million they paid out in salary and bonus (not including the stock thing). That works out pretty good for the top guys, I'm thinking, since VP's don't usually get more than say $400K a year. Guessing here but maybe the top 2 guys made a few million each last year.
And finally I find the answer to my question about the apparently growing equity: the o
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