Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Sometimes life just isn't fair. More than two months ago, investors in Dole Food
So what: Fresh Del Monte blamed the quarter's poor results (sales down 6%, causing a $0.16 per-share loss, versus $0.44 profit a year ago) on two items: lower selling prices for its bananas in Middle Eastern and Asian markets, and bad weather in Central America, which hurt the pineapple crop.
Now what: The banana news is especially troubling, as it's Fresh Del Monte's biggest revenue segment. News of lower selling prices also bodes ill for upcoming earnings reports from Chiquita
As for Fresh Del Monte, while the 10 times free cash flow valuation today looks tempting, analysts are forecasting only 7% long-term growth for the company. I'd suggest you wait a few days and see how bad the damage gets before deciding whether this piece of bruised fruit is a bargain.
Want to keep closer track of Fresh Del Monte ups and downs? Stock it in your pantry right now.
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