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发表于 2013-2-19 05:41 AM
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本帖最后由 jamesmith 于 2013-2-19 05:58 AM 编辑
UMAM
Sustainable seafood?
When I read Boomerang by Michael Lewis, the section about Iceland's privatizing and securitizing fishing ground caught my interest. (It is an fun and easy read, http://ishare.iask.sina.com.cn/f/21586847.html)
If there's some way to say that these fishes belongs to me(privatize) and if there's a way to measure every year, how many fishes are there and how many new fishes will be born and how much they will grow and have a way to allow this to be traded in the market(securitize). This could be a profitable business.
This is what UMAM does to Northern Bluefin tuna(very expensive and consider one of the best for sashimi and sushi) and Pacific bluefin tuna. They catch, grow and sell them!
To read about Northern Bluefin (http://zh.wikipedia.org/wiki/鮪魚, or for english: http://en.wikipedia.org/wiki/Atlantic_bluefin_tuna)
To my naive thinking, price is the result of demand and supply and demand for fish (for UMAM, bluefin tuna) should be "relatively" constant, especially for bluefin tuna because it is becoming rare. Thus the main focus would be supply. From my brief research, our world's bluefin tuna population is becoming smaller and smaller due to overfishing! some even said they might go extinct in our lifetime if we don't do something to protect them. When supply goes low, price rises and IF UMAM is able to maintain a high supply by farming bluefin, they can make a profit, this is their whole business idea.
Briefly reading their financial, its clear that they are not big enough to have benefit of scale. A significant portion of their biomass comes from catching, and about 12% to 16% of the quarterly amount is from growing (biomass is the term they use to calculate the amount of fish they their farm). They are aware and increased the size of their farm by a large amount in last year.
This is a volatile tiny cap stock.
Without going too much into financial, let's talk about the risk first.
1) business is highly seasonal (catching farming season with very little revenue, and harvesting season with large revenue), thus the stock is very volatile
2) company is under a good amount of debt, only 32.3% of total asset is equity, another way to put it is debt to equity ratio is pretty high
3) management change, CEO resigned recently, and I am not sure about management team's ability
4) concentrated in a small number of customer (6 customers) account for 99% of sale, and mostly japanese customer (bluefin is used to make expensive sushi/sashimi). This can be risky, usually you would want a business to have many many customers, so if some are in trouble, you have others to cover your ass.
5) currency risk, most customers are Japanese, Japanese Yen's change can effect business.
6) trading volume is very small, because this is a very small company
Now let's look at its pro
1) Bluefin tuna's population is reduced significantly from 1990 to now due to overfishing, this would cause it's price to go up and would require some sustainable way of supply, which is exactly what UMAM is doing.
2) UMAM has been making profit in 2010 to 2012. It's revenue and net income grew considerably.
3) UMAM's farming capacity grew considerably to try taking more advantage from farming rather than depend on catching
4) price has fallen >36% from high, with P/E of 16.69
SEC fillings here (http://www.umamiseafood.com/investors/sec-filings_new)
This is a volatile long term investment. It could be a fun idea to put small amount of money into, but in this stage I would not invest too much in it. UMAM has not proven itself yet.
The price has fallen a good amount recently because 1)usually price falls during catching/farming season), 2) CEO change, 3) delayed to report December quarter earning. The price was low enough and the business idea interests me, so I started a small position. |
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狗仔卡
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