Maple Leaf Foods – The Great White North: Finding Value In Meats

Maple Leaf Foods – The Great White North: Finding Value In Meats

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Bacon. Not Just Tasty, Profitable for Investors by TMFDeeJ aka Jason Knapp

Last month I wrote a post discussing a company that has invested millions of dollars and years of its time improving its operations that I believed was a coiled spring, ready to unleash fantastic operating results and in turn huge gains for investors. There has been another positive development in the situation. My last piece on the topic: A little talked about type of special situation and how to profit from it.

What Investors Need To Know When Choosing A Private Equity Manager

investor 1652197064It's no secret that this year has been a volatile one for the markets. The S&P 500 is down 18% year to date, while the Nasdaq Composite is off by 27% year to date. Meanwhile, the VIX, a key measure of volatility, is up 49% year to date at 24.72. However, it has spiked as Read More

For those of you who didn’t read my previous piece, the company I am talking about is Maple Leaf Foods.

I currently own real money positions in the company both on U.S. exchanges under its OTC ticker $MLFNF and directly on the Toronto Stock Exchange under the ticker MFI. Maple Leaf Foods is a Canadian company that produces meats, particularly pork, along the lines of the U.S. firms Hormel $HRL or Tyson $TSN.

On April 30th, the fruits of the years of labor that Maple Leaf Foods has put into getting leaner and meaner started to become apparent. The company turned its first profit in quite some time, reporting adjusted EPS of $0.05/share versus a loss of $0.24/share during the same period a year ago. Maple Leaf’s EBITDA margin improved to 4.7% from negative 1.1% a year ago as well.

Commodity prices remaining equal, I expect the operational improvement at Maple Leaf Foods to continue as it closed the last of its legacy facilities that it has been forced to run in tandem with its new state-of-the-art facility in April.

Even better, after more than a year of dealing with the massive headwind of high input costs and high consum