Quote Originally Posted by belgarion View Post
RBD is a cyclical stock that benefits from recessions where they can achieve exceedingly good margins on weak ingredient prices. If you truely think the market weakness isn't a result of the hardening of of ingredient prices (leading to lower margins) and consumers feeling a bit more confident and being sick of the taste of KFC and spending at other prices (leading to lower sales) you're deluding yourself.

re you "haven't seen anything that has altered RBD's intrinsic value". Neither did Bongo as we came out of the last recession. You can't see it just yet - you'll see it shortly though but the mrkts wiser than you think and guessed it before we'll see it. IMNSHO Mr mrkts got this one spot on.
Hi Belgarion

thanks for that. How do you find out about ingredient prices? As you point out, if these go up, KFC (aka RBD!) suffers. So any thoughts along how to find out those ingredient prices, and their potential movements would be great to know.

I guess my problem is... there is some market weakness, but I can't make a causal link with increasing (or potentially increasing) ingredient costs, because I don't know enough about where to get that data from. So any heads-up would be great.

I found:
http://www.stats.govt.nz/browse_for_...ry-prices.aspx

which is pretty interesting, but I understand that RBD has long-term (4 years remaining) agreements with Ingham and Tegal. Im not sure of the details, but I assume that price will be reasonably fixed. Interested to hear any other data around this.

cheers
Greg