Palm Valley Starts Smithfield Position as Pork Markets Weaken
The fund cited packaged meats as a support for profitability while higher feed costs and softer demand weigh on pork fundamentals.
Key takeaways
- Palm Valley Capital Fund initiated a small position in Smithfield Foods during the third quarter.
- The fund said packaged meats support profitability when hog farming and processing face challenges.
Palm Valley Capital Fund opened a small position in Smithfield Foods during the third quarter, citing its packaged-meat business as support during a downturn in pork processing.
The fund said pork industry conditions had weakened amid higher feed costs, including corn, and softer demand as consumers chose less expensive chicken. It said Smithfield earns most of its profits from packaged products such as bacon, sausage and hot dogs, rather than fresh pork.
Smithfield is an 87%-owned subsidiary of WH Group, another fund holding, according to the letter. As of 16:02 UTC on Monday, Smithfield shares traded at $18.85, down 0.05% since the previous close.
This article was produced with the help of AI technology. Source: Yahoo Finance
