dimanche 4 août 2019

High Liner Food (HLF.TO), a tool to destroy our civilization

A few years ago, many analysts, including Jason Donville, had a positive opinion about High Liner Food (HLF.TO).

To me, it never looked attractive enough to buy some shares. It looked just like an OK stock, nothing more.

On june 19th 2014, a little more than 5 years ago, Jason Donville recommended HLF. At the time, the stock was selling for 24,54$.

Today, the stock is selling for 10,34$. A drop of more than 50% in 5 years. What a bad investment it's been.

I won't write anything about EPS, ROE, and the usual metrics. I will only state that at my local grocery, I often visit the fish departement and, among all the frozen fishes, when I see High Liner packages, I can see that almost all (if not all) are fishes from China.

Do you trust China food, even when it's not transformed? I don't.

These fucking chinese put paint in their milk. They feed their fishes with shit. I don't trust chinese stuff. I think my opinion has some credibility because I was in China last year and I've smelled a lot of bad smells there.

So, in retrospect, I don't think that we should feel proud about that company because it's canadian. Eating safe stuff is important. Chinese want to destroy our civilization. They want us to buy their spy phones and eat their fishes full of shit.

That's how they'll destroy us for good.

3 commentaires:

  1. This was one of my falling knives from a few years ago. I sold out 1 or 2 years ago with a mid double digit loss several quarters after the Rubicon acquisition gave the company a death nail. I thought initially it was an interesting take over target which could help the big frozen food companies diversify away from less healthy foods on which they have built their business conglomerates. Also it was much cheaper than any comparable businesses and had management and founding family with large stake in the company. There was also some talk about HLF buying canneries and consolidating the cartel-like North American market as well as some fast growing trend farmed fish healthier value-added processing opportunities, which sounded interesting at the time. I trusted too much the rosy picture management and analysts were describing and was too greedy despite of steadily decreasing margins at the time of the purchase.

    What do you think killed the business? Bad acquisition for sake of growth at any price? Too much debt? Declining industry? Too high dividend payout ratio? Untrustworthy management? Bad management remuneration incentives and CEO greed? How can we avoid similar troubled companies in the future?

    Most seafood is questionable even though it is delicious. Most of world seafood is processed in cheap labour, low hygiene standards Asian countries, even if caught wild and fozen in North America. Also a large fraction of Asian-farmed shrimp etc. is contaminated with antibiotic resistant bacteria (which probably contaminates the processing factories for other seafood too). A large percentage of fish is also not the species it claims to be. Many unsafe or improperly labeled fish are also sent freely onto the market because the border inspectors only test a small random fraction of shipments and suppliers just resend the "rejected" shipments to other ports until they are not caught by random test and can be imported without any questions. The inspectors should confiscated, destroy and fine any unsafe food but they do not do it - even for habitual rule breakers (from what I was told).

    Interestingly some institutional and mutual fund managers have recently started initiating positions in salmon farming and fish processing and fish food manufacturing companies. Farmed fish is a big future trend and yet with Brexit, Russian sanctions, and Chinese tariffs, has quite a dark cloud over it at the moment ie growth market with reasonable valuation. I only own TSX companies and none of these companies trade in Canada so I have not looked deeper into their business.

    PS: I am a student and my supermarket budget is less than 1k per year (this includes all food, hygiene, cleaning, eating out, drinking, etc. spending) so I wouldn't buy HLF foods because they are too pricey for me despite of what Penetrator claims about their suspiciously "affordable" price. Cheap processed food is actually often quite expensive vs. cooking from basic ingredients from scratch (rice, potatoes, beans, lentils, peas, onions etc.).

  2. I cannot stop laughing. You deserve a pulitzer just for your conclusion.