Yesterday, in acceptance with reason and reality, Bunge Limited reported first quarter net profit more than tripled, thanks to global crop prices spiraling out of control. With a Q1 net income of $232 million, it absolutely trounced this same time last year, when BG made only $63 million.
That’s a buck-forty nine a share, coming off a year ago when they pulled sixty three cents.
Meanwhile, their full revenues increased by about 20%.
And, of course, in response to this, BG fell $1.16, because…because. Today, however, sense seems to have triumphed the day, and BG is presently trading back around $75 a share.
Listen to my words, as sure as I am resting here in my leather scented office; BG is going higher.
There doesn’t seem to be any realistic case against BG. What I am hearing snippets of is that somehow, since BG also has lines of business that need to take in grain, it all evens out, because they need to pay more, for instance, to operate their oil segment.
Horse shit.
For starters, when you’re growing the grain you’re using to produce the oil you’re selling, you aren’t concerned about profit margins. Even barring some fucked up foreign or domestic laws aimed to avoid that sort of behavior, I have the fullest of confidence in the ability of intelligent executives to get themselves their own resources at cost.
For another, there is this fancy term the kids are using called “mothballing.” If production gets too hard, I trust that this company has to be smart enough to simply slow down their unprofitable segments, which means full steam ahead for the agri-grain line of business. They aren’t obligated to make grain products, you fools. They can, in fact, just sell the grain out right for absurd profit margins.
And it looks like that is exactly what they are doing. The only criticism of BG I would have accepted was Analyst Bomber’s: that they somehow hedged themselves into oblivion, effectively fucking up victory-handed-on-a-silver-platter by over trading away all their profits.
But based on these results, I don’t think anyone can argue that’s what’s happening.
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I haven’t had a chance to look at the results yet, but the fact that BG is not falling off a cliff is a very good sign. Good call getting in here sub-$70.
Thanks for pointing me toward CCJ. I did my homework and read the chart. It is starting to bank me some coin.
Looks like my internet has died at home. I’ll see you all tomorrow from work.
(From my phone internet)