I have three children, so believe me I do not find the development of a possible pandemic strain of the H1N1 flu virus to be anything to joke about. However, I remember making buckets of money during the bird-flu scare by playing a few companies who would have stood to be beneficiaries should any pandemic strain have developed.
Since Tamiflu and Relenza appear to be an effective treatment against the latest strain, I suggest that any research into who stands to benefit the most from a pandemic starts with Roche and Glaxo.
Beyond these two drugs, a pandemic will require vast amounts of personal protective gear such as gloves, face masks/respirators, and possibly goggles. OSHA will mandate these items for workers. I do not know which medical services companies makes these items, but I suspect it is easy to find out.
If Americans are forced to work from home, look for a surge in software which makes it possible.
I would appreciate it if anymore ideas you all might have could be posted in the comments section.
I will say this…having studied these pandemics, this is not a laughing matter. Should it turn out to be a pandemic, millions of Americans could die. The machinery of the US will come grinding to a halt as all Americans are forced to stay home. In terms of the stock market, I can’t imagine a pandemic being a bullish development.
***Update from Bloomberg:
Obama’s Visit
The first case was seen in Mexico on April 13. The outbreak coincided with the President Barack Obama’s trip to Mexico City on April 16. Obama was received at Mexico’s anthropology museum in Mexico City by Felipe Solis, a distinguished archeologist who died the following day from symptoms similar to flu, Reforma newspaper reported. The newspaper didn’t confirm if Solis had swine flu or not.
The outbreaks are bullshit. Media-fabricated and if anything, the viruses themselves designed in a lab by eugenically-inclined assholes with too much money and time and their hands.
I say make money off it, but don’t cater to the completely manipulated corporate media that coordinates its bullshit messages and spoonfeeds its fear-based paradigms to the masses in hopes of more effectively enslaving them later on, with bullshit fabricated solutions designed to put more power into the hands of the few retarded assholes who happen to have insane addictions to the superficial aspects of life.
Some background on what happened in 1976 –
http://www.capitalcentury.com/1976.html
“Only young Lewis died from the swine flu itself in 1976. But as the critics are quick to point out, hundreds of Americans were killed or seriously injured by the inoculation the government gave them to stave off the virus.”
“Among other critics are Arthur M. Silverstein, whose book, “Pure Politics and Impure Science,” suggests President Gerald Ford’s desire to win the office on his own, as well as the influence of America’s big drug manufacturers, figured into the decision to immunize all 220 million Americans.”
Bman, with all due respect, if you have a family, you should be watching this closely. Please do not let a good conspiracy theory get in the way of protecting you or your family.
Pandemics are a natural part of being animals and living in an animal world. We try to forget that we are animals, but we are.
http://en.wikipedia.org/wiki/1918_flu_pandemic
For the record, Todd and Bman are the same person. Sorry to call you out Bman. Maybe it was an accident to post under an alias.
I’m hoping that there really aren’t loads of people out there who believe this is some kind of gov’t conspiracy.
Interesting stuff Wood! I agree, stuff like that ain’t no joke. Hope things are going good man, ain’t seen ya around on the PPT. Take it easy bro.
Wood,
During SARS, I had a friend in China who asked me to find as many 3M masks as possible (thousands and thousands of them). Pay any price – overnight them with no consideration to shipping cost.
3M supply ran out fast as demand exceeded supply by some crazy %.
I don’t even think those damn things even worked but he sold every last one and he made a killing.
You start to feel bad taking advantage of the situation but, then again, isn’t that what every drug company in the world does every single day?
Woodshedder or anyone else- Do you have any previous posts you can suggest, or have you tested the buy gap up or down open and sell at the previous day’s close ? I read it on Google Finance so it must be true ! (Anything that guarantees 1 mil.) Seriously, your thoughts on this ?
http://finance.google.com/group/google.finance.11217091/msg/cb379fe5ac03c005?hl=en
“ok ladies
heres another system that will make you a million + bucks FAST
Check it out for your self and tell me what you think
Its called fill the gap
Heres the last ten days with FAS and FAZ
account balance 04/13/09
$25k
Margin day trade buy power leverage balance $100 K
Number of losing days = 3 @ -3% each day max or 9% total
Number of gaining days =7 @ +46.46 % total or 6.63 % per day average
over 7 days
date gain/loss buy sell
04/13 +4.94 % $4940.00 $8.30 $8.71
04/14 -3% -$3592.00
04/15 +5.95 % $6270.00 $9.16 $9.51
04/16 +3.93% $5127.00 $7.40 $7.83
04/17 -3% -$4529.00
04/20 -3% -$3985.00
04/21 +15.49% $18110.00 $5.68 $6.65
04/22 +10.47% $19826.00 $7.07 $7.81
04/23 + 4.43% $11902.00 $9.49 $9.91
04/24 +1.25% $3953.00 $8.80 $8.91
average $5800.00 a day every day
Just wait until you get 90 days into it , you’ll have millions
Test it out on paper for a while , while you continue to trade the way
you have in the past
You dont need to use 4 times margin but you should if you have $25k to
start with
Heres how it works
You buy the ETF , that gaps down over night and sell it at the
previous closing price from the night before when it fills the gap
after the opening bell
You use a 3 % stop if it goes the other direction but if it goes up
and beyond the previous close price you set a stop loss at the
previous close price once it hits that price , so if it turns and goes
back down you will at least have the previous close price locked in .
If it continues higher you sell at the close price for the day
You reinvest the gains or loss back into your account the next day for
compounding interest
Check your charts and historical pricing
These are real prices and compounding amounts for the last ten days of
FAS and FAZ but you can use this system with any of the inverse ETF’s “
Check out APT and EMFP.
Masks, bro.
This actually could be a big deal. At a minimum some panic and could throw a curveball to economic recovery short term. Markets could get nervous. We shall see. Here is link to article from 2006 in MSN Money on influenza gambling. Seems to me that Roche, GSK, 3M, and diagnostic companies could benefit. Many of other stocks in article would not. Vaccine makers would likely get some attention. We do have stockpiles of Tamiflu in US built up for Avian Influenza.
http://moneycentral.msn.com/content/P144404.asp
I found this site during SARS.
http://www.fluwikie.com/
Loads of good information for protecting your family and community. I wasn’t thinking of it back then, so I will review the info again with an eye towards possible plays. The first idea I had beyond those stated earlier, was NFLX. One of the articles talked about people flocking to video stores to rent movies/games so they could huddle at home and avoid contact/possible infection.
If it turns out to be real and global, it is a game changer with effects lasting years. Millions could die and/or any economic recovery could get a serious body blow.
From FOX News
DR. MARC SIEGEL: The Most Powerful Virus Is Fear Not Flu
With a new swine flu strain spreading among close to 1,000 people in Mexico and at least eight in the U.S., and with 61 reported deaths in Mexico, the most powerful virus pushing out its tentacles is not flu but fear. We are afraid of what we don’t know and what we don’t understand.
We hear about an unseen killer and we worry that we will be next. The best antidote for this kind of fear is the facts.
So let me take on the fear-laden terms. The first is pandemic. A pandemic means a new flu virus infecting people in several areas of the world at the same time. It can be mild, moderate, or severe. Everyone knows about the 1918 Blue Death that killed over 50 million people worldwide, but how many people realize that the last pandemic, in 1968, ameliorated by vaccines, antibiotics, and public health measures, killed only 32,000 in the U.S. and 700,000 worldwide, less than many yearly outbreaks.
The current swine flu outbreak is not a pandemic, as the outbreak is confined mainly to Mexico, but if it does become one, it is far more likely to be the 1968 variety because of modern public health measures and because we have been exposed to several parts of this virus before and have an immune memory to it.
Precautions like isolating sick people and use of the anti-virals Tamiflu and Relenza in order to decrease severity are wise precautions.
Wise too is closing schools in Mexico to prevent spread (schoolchildren are notorious flu spreaders), provided that this measure doesn’t send the world the wrong message that a massive pandemic is in the offing.
The second scare term is the pig itself. Pigs scare us. They are filthy noisy creatures. They are also loaded with flu viruses. This strain occurred because a bird virus mixed with at least one human virus and two pig viruses. Flus are changing all the time so a new strain
isn’t really a surprise.
We also need to be cautioned by the lessons of history. Back in 1976 an emerging swine flu virus appeared to be responsible for the death of a military recruit at Fort Dix (this later turned out to be erroneous), sparking a massive public hysteria fueled by Center for Disease Control press conferences.
I was reminded of this Friday when the CDC again spread fear about an emerging swine flu. We need to remember that fear causes people to take less precautions, but fighting contagions requires more precautions.
In 1976 Gerald Ford, trying for election, ordered 40 million vaccinations over a three to four month period of time, probably leading to almost 1,000 cases of ascending paralysis from the hastily made vaccine (Guillain Barre Syndrome) and driving most of the vaccine makers out of business. We certainly don’t need a repeat of this performance, in advance of any real worldwide threat.
Thirdly, we are also afraid because this disease is emerging in Mexico, a foreign land to the south over which we have no control. But fear of an unknown land doesn’t automatically translate to an American health risk. We are wise to have our scientists and public health officials tracking the outbreak, but we are not wise to anticipate the worst.
Like all flus, this one causes great fatigue, muscle aches, fevers, sore throat, nasal congestion, stomach upset, but is generally curable. The greatest risk is from secondary infections like pneumonia or ear infections, especially in the chronically ill. But in the U.S., if it spreads here, these problems are much more easily treated than in rural
Mexico.
We should be comforted by the time of the year. This is the end of the flu season, not the beginning. Flu viruses thrive in the low humidity of winter, not summer. It is very likely that this outbreak will die out automatically as the summer comes. It will remain necessary to track it because it could reappear in the fall, but it is very unlikely that it will erupt into a pandemic this summer.
I am glad that this outbreak is a swine rather than a bird flu, not because pig viruses are intrinsically safer than bird viruses, but because the greater lesson to guide us here comes from the 1976 pig hysteria, rather than from the 1918 bird flu plague.
Marc Siegel MD, an associate professor of medicine at NYU Langone Medical Center, is a FOX News Medical Contributor. He is the author of “Bird Flu; Everything You Need to Know About the Next Pandemicâ€, and “False Alarm; the Truth About the Epidemic of Fear.â€
LONG SKF
That will get you through…..
and a little weed.
NXTM
The only FDA approved portable kidney dialysis maker.
You can treat yourself anywhere from your home to a camp site.
Good stuff people. Keep it coming….
Whipsawed, I will look into it. Playing gaps at the open, as long as money mgmt. is used, seems to be a sound strategy.
Wood –
If you look at the first bird flu outbreak in hong kong back in june 97, the hang sang was at 15,000. As the situation worsened in sept 97, the index fell to 10,000.
VCU, good find.
I’ve been hanging around the ppt, but just lurking. Work has been busy and I have 3 different baseball teams I have to keep up with, a little league, middle school, and varsity team. Things will slow down when baseball ends.
OK – I’ve been through one of these scares myself so I’ll add a few things I learned.
For the record, I was in Toronto in Winter 2003 when the whole SARS thing came to NA.
1. Take as a given that the news will run with this and intentionally or unintentionally freak out as many folks as possible so that as many webpage hits/newspaper purchases/minutes watching CNN are created.
2. It’s the flu. If you’re not sick, have a damaged immune system, a child, or a senior citizen – you probably have an 80%+ survival rate. (IANAD)
3. Get news from the source. Don’t watch CNN, or Fox or what have you. Read the actual news coming from Mexico. Use Google Translate if you have to.
For example, in the latest report from El Universal there are these items which don’t seem to be making the jump over to las noticias ingles:
1. Explicó que el gobierno federal cuenta con un millón de dósis antivirales que se compraron inicialmente para enfrentar un brote de gripe aviar, pero que se están utilizando para el tratamiento de la influenza porcina.
The Mexican government has purchased one million vaccinations already for the purpose of fighting bird flu. But they are using them for the swine flu. (note: Villalobos said in a news conference that they are having good success with the avian flu)
2. Las autoridades de salud confirmaron que hasta ayer se tenÃan ubicados mil cuatro casos de personas con influenza que ya se conocÃa.
Los estados de Hidalgo, Tlaxcala, Chihuahua y San Luis PotosÃ, junto con el DF y el estado de México, encabezan la lista de las entidades que tienen el mayor número de casos.
En los otros 18 estados no se han reportado enfermos de influenza, pero se alertó a la población a mantener medidas para evitar el contagio, principalmente en zonas fronterizas al norte y sur del paÃs, donde el movimiento migratorio es constante.
OK – about 4 thousand folks are considered exposed to influenza and they are in Hidalgo, Tlaxcala, Chihuahua and San Luis PotosÃ, [together] with el DF y el estado de México [the Federal District of Mexico – if my Mexican geography serves me well this is where Mexico City is].
HOWEVER, in the other 18 states there have been NO NEW REPORTS OF INFECTION.
I’m trying to locate a Mexican ‘CNN’ en vivo and will post if there are enough iBCers que hablan la idioma y quieren conocerlo.
Obama just shook hands with a guy in Mexico who died a few days later from the swine. Clearly, Obama is invincible.
TV Hidalgo (one of the effected states)
http://wwitv.com/tv_channels/b5109.htm
The biggest long shot for this is BTA on the ASX. Currently a penny stock and it has had a big run but if this spreads the stockpiling could pay off big royalties for the company. Biota’s develpoed relenza and are partnered with GSK. Oddly the stockpiling started before there were any reports of the swine flu hybrid.
Thanks Cuervos and Andy.
Fly, is there a source for that? I’d love to link to it.
Wood,
It’s on Drudge – from Bloomberg. Here is the Obama reference with a link to the story. WILD!!!
The first case was seen in Mexico on April 13. The outbreak coincided with the President Barack Obama’s trip to Mexico City on April 16. Obama was received at Mexico’s anthropology museum in Mexico City by Felipe Solis, a distinguished archeologist who died the following day from symptoms similar to flu, Reforma newspaper reported. The newspaper didn’t confirm if Solis had swine flu or not.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEsNownABJ6Q&refer=worldwide
Thanks Lazy! I updated the post. Holy cow is all I can think. Surely they keep Obama covered with hand sanitizer?
The stockpiling of Tamiflu was for the fear of avian (H5N1) outbreak. This virus is a Swine flu that is H1N1 type. Luckily Tamiflu does have activity against this new H1N1 virus- at least per reports. I’m not sure any current vaccine will be a perfect match against this new Swine virus. I suspect they are using what they have in a WTF do we have to lose mode. The fact that there are new cases in US reported today is alarming. The spread of this virus is much more difficult to control than most due to short (1-2 day) incubation and asymptomatic carriers. Normally it is the very young, very old, or unhealthy that are at highest risk from serious effects from infection with influenza viruses. However, in some pandemics of influenza, there has been a W shaped mortality curve and increased deaths in healthy young adults. Lets hope it does not become a bigger issue. I think the CDC website is a pretty reliable and up to date souce for info- http://cdc.gov/swineflu/investigation.htm
Anyone read ‘World War Z’ ?
Imagine the Zombie Apocalypse as seen through the eyes of of the survivors.
The reason I note this is because the outbreak is pandemic and the news shutdowns are what limit the global awareness.
Obviously, (contrary to any Truther doctrine) this is NOT what happened with the porcine flu.
How about owners of a large pig farm in the region with large feces pools?
SFD
http://www.grist.org/article/2009-04-25-swine-flu-smithfield/
Also interestng is that Smithfield was a rumored takeover target by a chinese firm for $17 on the 22nd. The rumor was denied by the company.
http://www.reuters.com/article/marketsNews/idUSN2247531420090422
Shed – sorry if these are duplicate links:
http://www.cnn.com/2009/US/04/22/missing.virus.sample/index.html?iref=newssearch
And this:
http://www.bloomberg.com/apps/news?pid=20601101&sid=aXjbg7pIcXo4&refer=japan
Andy,
Pig farms are disgusto (2nd only maybe to chicken farms). A strongly suspected link will bring about the disposal of millions of pounds of meat along with enough consumer fear to CRUSH pork belly futures.
Oh damn, I would NOT want to be long pork bellies right now… or SFD.
Wood,
Here is the money play?
2 ways 2 play hogs:
http://www.cmegroup.com/trading/commodities/livestock/lean-hogs.html
http://www.cmegroup.com/trading/commodities/livestock/frozen-pork-bellies.html
And here is some rough info on what mad cow disease did to cattle futures:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B97CAE273-D1F8-40D9-9525-F315B803DEEE%7D&siteid=google&dist=google
http://ideas.repec.org/a/ags/joaaec/43215.html
So, the gap down might be nasty tomorrow (Sunday pre-open at 4:15). The play might be in the recovery if the sell-off is nasty enough.
We would need DPeezy or someone with better options experience to figure out an exotic to limit downside risk but I would entertain a “buy the bottom falling out”.
No
QDEL is the play.
Lazyman-
Your buddy in China regarding SARS was “on the money” regarding 3M and their surgical masks. The problem with 3M is that they are so big I doubt there is much money to be made buying them (the stock). You need to find a smaller company where the bottom line can be impacted more easily.
On a side note- as a firefighter and Emergency Medical Technician, EVERYONE should invest in a few of these masks (more then a few actually). You want them to be rated at, or above N95 (N100 is better). Yes, they work!!! The problem is that you won’t be able to buy them if you wait for the sh*t to hit the fan. I liken it to bottled water and generators during hurricanes. If you wait, you lose.
Wood- you are wise to worry about your kids. Young kids and the elderly show the highest death rates among any type of flu. If a child under 2 years of age gets ANY type of flu you are in a very serious situation (automatic hospitalization). Be smart and protect your family. God bless.
Swine Flu in New York already?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTgD3ZjvANrI&refer=home
About 200 children from the 2,700-student St. Francis Preparatory School in Queens were absent last week with flu-like symptoms, said Thomas Frieden, commissioner for the New York City Department of Health and Mental Hygiene, at a press conference yesterday. All of the cases have been mild, lasting several days, and none of the children have been hospitalized, he said.
Wood – can you do the same type of detective work over at the peanut gallery? (re: Bman and Todd being the same person)..
I can’t imagine that Sweaty ballz and Drug Dealer are anyone other than joshingu (little2rich?)
grassyass
DMG, I can’t. I only have IP addresses reported for my blog.
I’m thinking a short of SFD might make a decent opportunity, if the gap-down in the a.m. is not too severe.
Update from Bloomberg that specifically mentions BAX, Novartis, and Sanofi-Aventis.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aD0VK0_oNmw4&refer=home
Wood,
SFD short looks solid for other reasons as well:
http://www.reuters.com/article/marketsNews/idAFN0148935020090408?rpc=44
Cash flow is negative.
They aren’t making money
http://finance.yahoo.com/q/is?s=sfd
And the BEST part:
Look at the inventory number vs. net assets – if they have to destroy the inventory, they are broke. And – I’m assuming this does not include product they’ve already delivered – they will surely have to take that hit should it have to be destroyed. Add the cost to transport and destroy it, some heavy fines, some massive legal fees. Bad image for the brand, bad image for pork in general… Then you have their largest asset – property/plant/equipment – good luck getting fair value on that in this economy!
And I can not imagine any type of insurance would cover them if they are not compliant with regulations (what I’ve read regarding cleanliness is not complimentary).
Also – this appears to be almost a pure play on pork – with a little turkey added in but it just doesn’t get better than this
You got a weenie roast!
I still really like the futures play for a bounce though if this gets really ugly.
lieutenantfox,
3M is surely too big to play based on mask sales alone. Even if they weren’t, they could not keep up with production at all during SARS – doubtful if they could now.
When he asked, I was sure I could find them at Home Depot, Lowes, etc. but I really had to work. I only found them at 2 distributors for floor cleaning equipment and another for painting supplies.
I didn’t even want to ask how much money he made on that.
“Woodshedder or anyone else- Do you have any previous posts you can suggest, or have you tested the buy gap up or down open and sell at the previous day’s close ? I read it on Google Finance so it must be true ! (Anything that guarantees 1 mil.) Seriously, your thoughts on this ?”
Gap fill has historically worked very well on the SP-500, so it wouldn’t shock me that it works well anywhere else. Not a lot of data to critique here and it would require an intraday test (something I can’t do – Wood can).
The guy is trading 3x ETF with 4x leverage – or a total of 12x leverage. If you’re happy doing that, go for it. For me, way too much leverage and if you can’t get out at the 3% stop you could be in trouble. All just imho.
Good find Lazy! I’m probably going to take a small short position in SFD, assuming the futures are showing it to gap down large in the a.m.
Side note: on May 9th, the Woodshedder clan will be hosting our annual luau, where we get a whole smoked pig brought in, and everyone eats and drinks for the afternoon and evening.
We’ve already ordered the pig. I’m hoping we do not get hosed on the price. If we do, SFD short will be a hedge on the pig price for the luau 😉
Damian and whipsawed, Tradestation has most of the code to test this readily available. However, I have about 4 things I’m supposed to be working on this weekend, and I won’t get to them all….we’ll see if I can run the gap study.
Sick humor. I’m bored. Feel free to add. Newspaper headlines:
Mexican Drug Cartel Died Like Pigs!
Senior Tropicana Alive and Well In N.Y.!
Half Off 1 Week Stay At All Inclusive In Cancun!
Wood,
Apple in the mouth of course. How about a hedge against bad Don Ho impressions?
This is all assuming, of course, that the meat will either be tainted -or- that the public will perceive a taint (maybe a nice story about conditions down-on-the-farm). Ever been to a pig farm? Even a relatively clean one would make good news.
Either way, I would expect the story to get a little extra mileage with SFD owning Butterball and Armour.
lol at stries and hedges against bad Don Ho impressions.
In a former life, I raised one pig a year. I also had a good friend whose wife worked in chicken factories.
I’ve seen and heard about some pretty awful conditions for pigs and chickens.
New from the CDC.
http://www.cdc.gov/swineflu/pdf/brochure.pdf
Looks like the play would be either that the live hogs would have to be put down (big cost) or that people would just shun pork.
BTW – no proactive response from them yet at least on their site. http://www.smithfieldfoods.com/media/news.aspx
When Bird Flu was all the rage, I caught good moves in NVAX, GNBT, and HEB. All tiny biotechs that magically claimed to have a bird flu vaccine in development. I assume they will try to get on the Swine Flu train as well.
Just checked the quotes on them, and they already had a huge move on Friday. Wouldn’t be surprised by more upside, though.
Stries pretty much called it.
CDC:
“Viruses from six of the eight patients have been tested for resistance to antiviral medications. All six have been found resistant to amantadine and rimantidine but sensitive to zanamivir and oseltamivir.”
No time to figure out which drugmaker will benefit…
Wood- SFD may actually be a Costanza buy this week sometime, because of this.
__
Russia Suspends Imports of Meat From Mexico, Some U.S. States on Swine Flu: http://tinyurl.com/c6rw2s
I own Zhongpin (HOGS), a big player in Chinese Pork. Perhaps Russia and others will look to China to replace the Mexican pigs.
Jakes,
I think the key there is:
“If this thing has any teeth on it the stock would have jumped close to $17,” Gilpin said in an interview.
She said it makes sense that Smithfield would want to pursue a sale since the business is suffering amid a slump in the meat industry. But that doesn’t mean it would fetch that high of a price.
“Given the financial situation that this company is in, they’re obviously very highly leveraged and they’re losing money on a quarterly basis, for many quarters now,” she said. “A deal could probably be done at a lower price.”
I’m thinking, if they really want to buy, they may get a banana next week if the stock tanks. The value, however would only be in the brand and the infrastructure. If they have to destroy enough “inventory” their balance sheet will start to look like a bank.
So then, how bad does the brand take a hit if the headlines say “Smithfield, owner of Butterball, Armour, et.al. is the root (no pig pun intended) of the swine flu pandemic that has killed…”
Mushroomz,
Good call.
Either people stop eating pork forever after this or you become a dip (or plummet) buyer of pork futures, alternate suppliers, etc.
Venture Capitalist to reap huge rewards from swine flu:
http://tinyurl.com/cv9u6j
I don’t think the Smithfield brand has much power. Very few good brands in meat: maybe in chicken or turkey, like Tyson or Butterball. Others like Oscar Meyer, Nathan’s, etc.
I think most of the pork biz is B2B and has more to do with quality control and major account mgmt.
Perhaps Smithfield has some barriers to entry like environmental permits or long-term exclusive supplier deals which could be valuable?
If not, all you need is some land and a sales force (which is likely an indirect sales force anyway). Not much enterprise value there to my eyes.
Looking further into SFD. Smithfield owns 50% of Granjas Carrol de Mexico which owns the farm. The investment is only valued at 29.3 million on Smithfield’s books. So the total write off of this investment will not materially affect the company but the loss of 50% of the 950K annual hog production may. However if there is a large drop in demand for pork products Smithfield will be significantly impacted. Russia is one of their top five export markets, if Japan and China follow suit on bans it will significantly impact the company and will most likely result in it being broken up at a later date. The company has been expanding though acquisitions since the early 80’s. There are also some political forces that want to prevent meat processors from owning farms that produce the animals in the states, this pressure may increase if it is shown that the production methods on the farm were responsible for the outbreak.
Still think this may be shortable for a quick trade but as Jakes points out it could also lead to a nice dip to buy later. I don’t think the buyable low will come right away though.
To play a bounce on weakness I would prefer to buy TSN, Tyson foods because their beef and chicken segments should offset weakness in the pork segment when substitution kicks in. The one negative on this thesis is that their most profitable segment was pork with chicken showing a loss and beef showing a very small profit margin.
Wow, I wish it wasn’t a buyout candidate. That, my friends, would suck, being short when the equity gets a buyout premium.
Maybe puts are the way to go. Maybe someone can suggest a nice option play?
I don’t think the Smithfield brand has much power.
I dunno Boom… Eckrich, Armour and Butterball are pretty well known brands… and even Smithfiled is relatively well known.
Meanwhile… what about Hormel (HRL)?
Who’s gonna make the SPAM, man??
____________
short CCL, perhaps MAR
Jake – the point being you can build a brand cheap. I could launch MOOBER’S SOUTHERN MEATS & BISCUITS with a few hundo. It’d be the best brand in the land. Free toothpick with each chop.
“Only MOOBER’S MEATS is fit to be eat.” Notice the grammatically incorrect slogan, providing authenticity. I will buy my meats from Smithfield.
… and Bryan Foods (the Flavor of the South)(although I think now owned by Sara Lee of Chicago).
http://investors.smithfieldfoods.com/releasedetail.cfm?ReleaseID=379761
Smithfield denies link.
Who gives a fuc* about multiple posts or IP addresses? What are you running here, your own little mini-FBI? Is that going to make me want to read you blog, knowing you’re a nosey, paranoid dude? The IP address I surf with is never mine — what are you going to do about it?
Uncle, go bugger somebody.
I could give two turds and a lambs tail whether you read my blog or not.
Wipsaw,
I have played the gaps…..so stats for you.
GAP DOWN stats last 100 days-
FAS gap down 48 times filled 28 times
FAZ gap down 47 times filled 33 times
This is very hard to back test because you want to let your winners run
@gonzotrader — what do you consider a gap? >1%?
Any gap counts in the above stats.
High – Open last 5 days….
FAZ – 0.13 0.22 0.36 0.64 0.03 (1.69 total for 5 days)
FAS – 0.60 0.58 0.84 0.49 1.28 (3.79 total for 5 days)
I know you will not be able to sell at the top, but if your good you should be able to get within a dime.