Author Topic: HNFSA/HNFSB - Hanover Foods  (Read 65255 times)

oddballstocks

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HNFSA/HNFSB - Hanover Foods
« on: April 18, 2012, 12:34:35 PM »
I did two posts detailing Hanover Foods a vertically integrated frozen food company located in Pennsylvania. 

The company is family owned and controlled and unlisted.  I figured I'd get that out there early so 98% of this message board can click away now.  If you're still reading here are some highlights:

The company went dark in 2004 paying shareholders $131/share for their A shares, at the time the A shares were trading in the same range they are now ($80/sh range), a considerable premium.  During the going private transaction a valuation was completed which pegged the fair market value of the A shares at $131 and the B shares at $138.  At the time of going dark the book value of Hanover Foods was $99/sh.  Fast forward to today:

Earned $16.24/sh in 2011 has a current P/E of 5
Grew book value from $137/sh in 2004 to $250/sh in 2011
Liquidation value of $99.39/sh
The company has an outstanding offer to buy employee owned shares purchased before 1988 at $150/sh.
$37.89/sh of cash from operations for a P/CF of 2.16
FCF of $23.79/sh for a P/FCF of 3.44
EV/EBIT of 4.45 and EV/FCF of 4.59

Using a range of values from earnings power, book value, and appraised value I came up with a IV range of $150-250 a share for Hanover Foods.  This is double or more than today's share price.

I go into more detail on the posts, but would be interested in this board's thoughts.  I have a position in the B shares.

Here are the two posts:
http://www.oddballstocks.com/2012/04/hanover-foods-part-1-story.html
http://www.oddballstocks.com/2012/04/hanover-foods-part-2-figures.html

Nate
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Kraven

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #1 on: April 18, 2012, 03:46:13 PM »
Very interesting.  Thanks for posting it.
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nkp007

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #2 on: March 01, 2013, 08:35:27 AM »
Just bought some. Not really sure what to expect, but it's fundamentally very cheap and been around for a while. Obviously not a concentrated position because of lack of transparency...but would love to discuss with people who are also invested.

Hielko

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #3 on: March 01, 2013, 09:15:20 AM »
Do you have the financials? Would like to take a look at this :)

nkp007

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #4 on: March 01, 2013, 09:20:52 AM »
Do you have the financials? Would like to take a look at this :)

Check out Oddball's part 2 post. It has the important numbers (except for depreciation!).

I don't have the financials yet.

Olmsted

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #5 on: March 01, 2013, 10:09:54 AM »
Doesn't Nate run a website for unlisted financials?  I'm sure that Hanover is in there, and I'm sure there is a link to it on his blog.

ScottHall

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #6 on: March 01, 2013, 05:49:57 PM »
Just bought some. Not really sure what to expect, but it's fundamentally very cheap and been around for a while. Obviously not a concentrated position because of lack of transparency...but would love to discuss with people who are also invested.

I own this. The annual report isn't really very detailed so there's not a lot to talk about.
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oddballstocks

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #7 on: March 01, 2013, 07:26:09 PM »
My ears were burning, so I figured I'd respond.  Yes, I own it and like the company, and yes the financials appear on my unlistedstock.net site as well.

I'm in a generous mood tonight so I posted the 2012 annual report.  As ScottHall mentioned, not much additional information available beyond what I'd posted in the blog.

The interesting pieces of information with this company come from on the ground sources.  A friend of a friend talks to Michael Warehime occasionally and had some insight.  Apparently most of the shares coming onto the market are Michael's shares, he hates his brother and regularly donates his Hanover shares to a few local charities.  The local charities sell the shares for cash, that's the source of what we're seeing out there.

John Warehime has been acceptable at running the company, he's been a pretty decent capital allocator by purchasing up other brands and bolting them onto Hanover.  In the 2012 report there are signs the company is at work acquiring another company though a joint venture.

I've debated driving out to Hanover a few times just to check things out, if I get the chance I might.
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ScottHall

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #8 on: March 01, 2013, 10:56:18 PM »
Anyone care to speculate what will happen to Hanover after John Warehime kicks the bucket?
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Green King

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Re: HNFSA/HNFSB - Hanover Foods
« Reply #9 on: March 02, 2013, 02:35:35 AM »
Oddball thanks
Can i have some more please?:) I think I need at least 5 years to have an opinion.

Thanks

GK
« Last Edit: March 02, 2013, 02:37:20 AM by Green King »
GK