Moving onto poultry business ING which has struggled over the last 12 months with supply chain problems, COVID-absenteeism, weather and input cost inflation all weighing on the business i.e. last year was a tough one for the industry:
- Profit fell almost 60% to $35m, well below the consensus of $43m despite volumes increasing more than 4%.
- Painfully the company said consensus expectations were too high for FY23 and we should expect downgrades of up to 10%!
Not surprisingly the stock was hammered last month but on a valuation of 16.2x FY23 (depressed) earnings, the risk/reward is improving especially as we believe the worst of the headwinds could be behind the business.
MM likes ING into a “spike low” below $2.50
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