Sanderson Farms Inc

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SAFM : NASDAQ : Consumer Goods
$88.89 | %
Today's Range: 87.76 - 89.66
Avg. Daily Volume: 423,600
07/22/16 - 4:00 PM ET

Financial Analysis


SANDERSON FARMS INC's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. SANDERSON FARMS INC is extremely liquid. Currently, the Quick Ratio is 2.36 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.97% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)692.09716.59
EBITDA ($mil)94.75128.27
EBIT ($mil)73.77109.52
Net Income ($mil)47.671.25


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)223.12153.63
Total Assets ($mil)1324.31186.87
Total Debt ($mil)0.010.0
Equity ($mil)1089.44972.95


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin19.4822.02
EBITDA Margin13.6917.9
Operating Margin10.6615.28
Sales Turnover2.052.45
Return on Assets10.325.86
Return on Equity12.5331.54
Debt Q2 FY16 Q2 FY15
Current Ratio4.073.47
Debt/Capital0.00.01
Interest Expense0.420.72
Interest Coverage175.65153.18


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)22.5822.41
Div / share0.00.0
EPS2.113.13
Book value / share48.2543.41
Institutional Own % n/a n/a
Avg Daily Volume423645.0493043.0

Valuation


BUY. SANDERSON FARMS INC's P/E ratio indicates a significant discount compared to an average of 46.79 for the Food Products industry and a significant discount compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 1.83 indicates a discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 6.02. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, SANDERSON FARMS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SAFM 14.51 Peers 46.79   SAFM 8.01 Peers 18.09

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SAFM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SAFM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SAFM 15.13 Peers 23.49   SAFM NM Peers 1.23

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

SAFM is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SAFM's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SAFM 1.83 Peers 6.02   SAFM -54.50 Peers 68.51

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SAFM is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SAFM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SAFM 0.73 Peers 2.53   SAFM -6.75 Peers 144.88

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SAFM is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SAFM significantly trails its peers on the basis of sales growth

 

 

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