Here is Why Sanderson Farms Stock is Still Undervalued

SAFM has increased 10% just in the past month

facebook X logo linkedin


Sanderson Farms, Inc. (NASDAQ:SAFM) is the third largest producer of poultry in the United States with more than 13.6 million chickens produced per week. SAFM is engaged in the production, processing, marketing, and distribution of fresh, frozen, and minimally prepared chicken. The poultry producer currently operate 12 poultry plants and one processing facility. 

Sanderson Farms stock has increased about 16% over the past 12 months and just hit a record high of $221.63 during yesterday's session. Additionally, SAFM is set to log its best month since February 2021, and string together its third-straight monthly win. 

Despite this, short-term options traders have rarely been more put-biased. This is per SAFM's Schaeffer's put/call open interest ratio (SOIR) of 5.91, which sits higher than all but 1% of readings from the past year. 

The equity could be ripe for upgrades, too. Of the three covering Sanderson Farms, all condsider it a "hold."

Nonetheless, SAFM still provides a very low valuation at a price-earnings ratio of 5.69 and a price-sales ratio of 0.85, with its forward price-earnings ratio at 5.05. Sanderson Farms stock also offers a dividend yield of 0.83% with a forward dividend of $1.76. In addition, the poultry business comes with a low level of risk due to its excellent balance sheet. Sanderson Farms currently has just $20.69 million in total debt, while holding $829.12 million in cash on its balance sheet.

Sanderson Farms has already managed to increase their trailing 12-month revenues and net income by 17.2% and 89.9%, respectively, compared to what it reported for fiscal 2021. SAFM is also expected to end fiscal 2022 with 31.3% revenue growth and 134.2% earnings growth. However, the poultry company’s fiscal 2023 estimates indicate a 35.9% decrease in earnings and a 3.5% decrease in revenues. Still, Sanderson Farms stock remains an incredibly undervalued stock by most valuation metrics.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI