Smithfield Foods, Inc. (SFD)
Consumer Defensive · NMS · US
Fundamentals
Valuation and ratings
Smithfield Foods, Inc. trades at USD25.62, which is 113% below the USD54.47 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 34 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 9.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Smithfield Foods, Inc.
Smithfield Foods, Inc., together with its subsidiaries, produces various packaged meats and fresh pork products in the United States and internationally. It operates through Packaged Meats, Fresh Pork, Hog Production, and Other segments. The Packaged Meats segment processes fresh meat into various packaged meats products, including bacon, sausage, hot dogs, deli and lunch meats, dry sausage products, ham products, ready-to-eat products, and prepared foods to retail and foodservice customers. This segment markets its packaged meat products under the Smithfield, Eckrich, Nathan's Famous, Farmland, Armour, Farmer John, Kretschmar, Krakus, John Morrell, Cook's, Gwaltney, Carando, Margherita, Curly's and Smithfield Culinary, as well as under private labels. The Fresh Pork segment processes live hogs into a variety of primal, sub-primal, and offal products, such as bellies, butts, hams, loins, trimmings, picnics, and ribs. This segment sells its fresh pork products to retail, foodservice and industrial customers, as well as to export markets, including China, Mexico, Japan, South Korea, and Canada. The Hog Production segment produces and raises its hogs on various company-owned farms and farms that are owned and operated by contract farmers. This segment also sells livestock feed and grains; and provides transportation and other ancillary services. The Other segment engages in the bioscience operations uses raw materials from hogs that process to manufacture heparin products, including an active pharmaceutical ingredient that mitigates the risk of blood clots; and produces fresh pork products in Mexico. The company was founded in 1936 and is headquartered in Smithfield, Virginia. Smithfield Foods, Inc. is a subsidiary of SFDS UK Holdings Limited.
SFD passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
10 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Two Sigma, TWO SIGMA INVESTMENTS, LP$117.95M · 0.1% of book
- Israel Englander, MILLENNIUM MANAGEMENT LLC$30.69M · 0.0% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$30.62M · 0.0% of book
- Joel Greenblatt, Gotham Asset Management, LLC$28.60M · 0.1% of book
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$9.08M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Smithfield Foods, Inc. (SFD) undervalued?
Against our discounted cash flow estimate of USD54.47, SFD at USD25.62 is 113% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own SFD?
10 of the institutions we track reported a position in SFD in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is SFD's P/E ratio?
SFD trades at 9.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for SFD, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.