Seneca Foods Corporation provides packaged fruits and vegetables in the United States and internationally. The company offers canned, frozen, and bottled produce; and snack chips and other food products under the private label, as well as under various national and regional brands that the company owns or licenses, including Seneca, Libby’s, Aunt Nellie’s, READ, Green Valley, and CherryMan. It also produces and sells Green Giant and Del Monte vegetable products under contract packing agreements. In addition, the company engages in the sale of cans and ends, as well as trucking and aircraft operations. It provides its products to grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores, and dollar stores; and food service distributors, industrial markets, other food packagers, and export customers in 90 countries, as well as federal, state, and local governments for school and other feeding programs. This week, I fundamentally analyze Seneca Foods’ stock. I review SENEB’s organizational restructuring and operating segments, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account Seneca’s 2020 free cash flow of $62 million figure, a 5% growth rate of FCF (growth for the next 10 years), 10% discount rate, 1.9% long term growth rate (growth from 10 year mark in the future to perpetuity), 9 million shares outstanding, and $94 million of long term debt, the DCF analysis yields us an intrinsic value of $95.32 per share.
0:26 Business Overview / 10-K
3:44 Key Ratios Analysis
14:26 Discounted Cash Flow Analysis / Intrinsic Value
Seneca Foods’ Website: here.
Morningstar Key Ratios Link: here.
Useful Resources here.
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