Watchlist gets some attention, Dammit.

By Travis Johnson, Stock Gumshoe, January 28, 2013

Well, unfortunately my hope that I could sniff around Dole Food (DOLE) for a while and nibble at a lower price has been dashed, at least for the day — Barron’s featured them as a bargain over the weekend and the shares spiked 10% today.

They’re still on our Gumshoe watchlist because their balance sheet just improved dramatically (or will when their recent offloading of their Asian assets goes through), and they might one day be able to book a big profit on their non-core Hawaiian land, but I was hoping they’d be downtrodden and disliked for a bit longer. They aren’t necessarily expensive now, I’m still not sure what price is reasonable for the stock (that’s part of the reason they’re on the watchlist, not in my portfolio), but they are more expensive than they were on Friday.

If you missed that note from Barron’s, the basic pitch was this:

“Dole trades at a deal-adjusted enterprise value of 6.7 times 2013 estimated earnings before interest, taxes, depreciation, and amortization—in line with historical multiples for fruit companies. But after you factor in the company’s 113,000 acres of farmland, including 25,000 acres on Oahu—of which 16,500 are listed for sale, the valuation falls to just four times Ebitda. The company values the land at $500 million.

“Dole’s shares could be worth more than double their current price, and while shareholders aren’t likely to see that value realized in a hurry, the divestiture is a step in the right direction. Over the next year, the stock could rally 25% or more.”

After they drove the shares up 10% today ,they issued a bit of a followup here. I’ll keep my eye on them.

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