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Multiexport Foods Stock – Investment Analysis

Common Stock: Multiexport Foods (MULTIFOODS)

Current Market Price: $330 CLP ($0.45 USD)

Market Capitalization: $463 Billion CLP ($629 Million USD)

*All values in this article are expressed in United States Dollars (USD) unless otherwise noted.

**The bulk of this analysis is based on the company’s most recent audited financial report, which can be found by following this link.

Multiexport Foods - Stock Chart
Multiexport Foods – Stock Chart

Multiexport Foods Stock – Summary of the Company

Multiexport Foods is a vertically integrate Chilean fishing and aquaculture company. They raise, process, and sell fish products around the world. Their main product is Salmon. The company has sales in over 30 countries, with the USA, Japan, and Brazil being their 3 largest export markets. Multiexport Foods was founded in 1987 and is headquartered in Puerto Montt, Chile. They employ around 2,600 people.

Revenue and Cost Analysis

In 2019 the company sold 90,000 tons of fish! Their total revenue in 2019 was $568.4 million, a significant increase compared to $537.2 million in 2018. Their COGS in 2019 was $478.4 million, representing a gross margin of 16%, a decrease compared to 22% in 2018. This decrease in gross margin is due to lower global salmon prices.

The company was profitable in each of the last two years. In 2019 Multiexport Foods had net income of $43.4 million, representing a profit margin of 7.6%, a significant decrease compared to 15.1% the previous year.

Multiexport Foods - Export Markets
Multiexport Foods – Export Markets

Balance Sheet Analysis

Multiexport Foods has a sound balance sheet. They have a sound liquidity position, a good base of long term assets, and reasonable liability levels.

Multiexport Foods – Debt Analysis

As of year-end 2019 the company has $65.8 million in total debt outstanding, $13.9 million of which is classified as current.

Multiexport Foods Stock – Share Dynamics and Capital Structure

As of year-end 2019 the company has 1.4 billion common shares outstanding. Their 10 largest shareholders own a combined 86% of the company.

Multiexport Foods Stock - Ownership Structure
Multiexport Foods Stock – Ownership Structure

Multiexport Foods Stock – Dividends

The company paid total dividends of $0.007 cents per share in 2019. At the current market price this implies a dividend yield of 1.6%.

Multiexport Foods Stock – 3 Metrics to Consider

Debt to Equity Ratio

Total Liabilities/Total Share Holder Equity

$303.9 million / $362.7 million = .84

A debt to equity ratio of .84 indicates that Multiexport Foods uses a mix of debt and equity in its capital structure, but is not leveraged, and relies more heavily on equity financing.

Working Capital Ratio

Current Assets/Current Liabilities

$446.2 million / $192.8 million = 2.3

A working capital ratio of 2.3 indicates a sound liquidity position. Multiexport Foods should not have a problem meeting its near term obligations.

Price to Book Ratio

Current Share Price/Book Value per Share.

$0.45 / $0.26 = 1.7

Multiexport Foods has a book value per share of $0.26 cents. At the current market price this implies a price to book ratio of 1.7, meaning the company’s stock currently trades at a premium to the book value of the company.

Multiexport Foods Stock – Summary and Conclusions

Multiexport Foods is a solid aquaculture company. They export globally and are in good financial health, with a profit and sufficient liquidity. The company returns capital to shareholders via a dividend.

Multiexport foods is one of several Chilean Aquaculture companies I view as investable. Investors should compare Multiexport’s stock to other Chilean fish companies such as Blumar.

Disclaimer

This is not investment advice. Nothing in this analysis should be construed as a recommendation to buy, sell, or otherwise take action related to the security discussed. If I own a position in the security discussed, I will clearly state it.

This is not intended to be a comprehensive analysis and you should not make an investment decision based solely on the information in this analysis. I hope this serves as a useful starting point for a more comprehensive analysis, and hopefully draws attention to aspects of the company that were overlooked or merit further investigation. This is by no means intended to be a complete analysis. Again, this is not investment advice, do your own research.

Patrick Flood, CFA

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