Why Buy Now?
A hedge fund manager named David Tepper just purchased over 7% of the entire Dean Foods Company. David Tepper is a World renowned stock investor who absolutely crushes market averages year in and year out. If you don't believe me, click this link. Do you remember that expression, "If you can't beat them, join them"? This is one of those "join them" stock investments. We're buying along with David Tepper.
Over the past 52 weeks, Dean Foods shares have decreased over 45% in value compared to a positive market return of over 10%. Shares of Dean Foods have already started to rise again which I think is a sign that the fall has "bottomed out."
What is Dean Foods
Dean Foods is a company that sells a variety of dairy and soy products. According to Yahoo Finance, "It sells its products through internal sales force and independent brokers to the retailers, distributors, foodservice outlets, educational institutions, governmental entities, grocery stores, club stores, natural foods stores, mass merchandisers, convenience stores, and drug stores."
Financial Data
If you want to check out all the key financial data, you can click this link. My brief analysis is below:
I consider an investment in Dean Foods to be a value investment. In this case, we are investing in a pretty good company at a very good price. Dean Foods is definitely not a powerhouse company with extremely high profit margins or high growth rates, however, it does have decent profit margins and decent growth rates. Another thing to consider is that Dean Foods has a high amount of debt relative to its cash position. I do not think this is very worrisome because the amount of debt has decreased for the past three years. In other words, the debt is going away and not piling up.
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