Opinions
Stephen Weiss, Founder, Short Hills Capital Partners
Bunge Ltd.
BG-N
BUY
Feb 13, 2023
Stock price when the opinion was issued
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This Missouri based ag company has entered into a merger that will expand its global footprint. Recently reported earnings were up 25% on the year. We like that cash reserves are growing, while the company aggressively retires debt. It trades at 9x earnings and 1.6x book, while supporting a 19% ROE. We recommend placing a stop-loss at $95, looking to achieve $136 -- upside potential of 19%. Yield 2.2%
(Analysts’ price target is $136.45)With recently reported sales beating analyst estimates, we reiterate BG as a TOP PICK. Tightening margins did shave something of the top end earnings for this international agribusiness company, but we liked that cash reserves continue to grow, while debt is aggressively retired and shares bought back. It trades at 9x earnings, 1.5x book and supports a 20% ROE. The dividend is backed by a payout ratio under 20% of cash flow. We continue to recommend a stop at $95, looking to achieve $134 -- upside potential of 26%. Yield 2.4%
(Analysts’ price target is $134.67)Our PAST TOP PICK with BG has triggered its stop at $95. To remain disciplined, we recommend covering the position at this time. When combined with the previous buy recommendation, this will result in a net investment loss of 13%.
They reported a mixed quarter and was downgraded, and yet shares went up. He expects it to extend far past $100.