Tyson Foods is facing challenges
Q: Will my shares of Tyson Foods Inc. be doing any better? — R.J., via the Internet
A: Because the nation's largest meat producer ranks second domestically in both chicken processing and pork producing, it should see some sales gains in those areas as consumers shift to less expensive meats because of economic concerns.
But it has economic worries of its own because it expects the cost of feed grains, corn, soybeans and cooking oil to be as much as $1 billion higher this fiscal year than a year ago. That is also boosting the prices consumers pay.
Pilgrim's Pride Corp., the No. 1 chicken processor in the U.S., recently cut its production about 5 percent, mostly in response to higher feed costs. Tyson said it does not need to cut production.
The No. 1 processor of beef products in the country, Tyson holds one-fourth of the industry's domestic market share of that meat. Beef represents 45 percent of the company's total revenues, with chicken accounting for 33 percent, pork about 12 percent and the remainder prepared foods.
Shares of Tyson (TSN) are down two percent this year after declines of seven percent last year, four percent in 2006 and seven percent in 2005. Retired Chairman Don Tyson controls 71 percent of the firm's voting power.
Tyson reported a $5 million loss in its most recent quarter, in part because of plant closings and other cost cutting. Pork was strong during the quarter, while chicken and beef slipped. The firm raises the chickens it processes and buys cattle and hogs.
The consensus analyst recommendation on its shares is "buy," according to Thomson Financial. That consists of four "strong buys," three "buys," three "holds" and one "underperform."
There are risks. For example, Japan and Russia recently temporarily stopped importing chicken from Arkansas after 15,000 Tyson chickens showed signs of low-pathogenic avian influenza. Tyson was also ordered by the US government to stop using an "antibiotic-free" label on products after it was determined that it was using an antibiotic in chick hatcheries.
Earnings are expected to decline six percent in its fiscal year ending in September and increase 93 percent the following fiscal year.
Q: I've been told about a new fund called Marsico Global Fund. Is it worth considering? — F.R., via the Internet
A: There are three good reasons why investors might be interested in a $97 million fund down three percent in value since its launch in July 2007.
Those reasons are portfolio managers Corydon Gilchrist, Jim Gendelman and Thomas Marsico, all proven investors who have excelled at other funds and are expected to bring success to this one.
Marsico Global Fund (MGLBX) is also reasonably priced, with an annual expense ratio of 0.75 percent.
"We've seen a bunch of new global funds come to the market, and this one we really like because the resources and pedigree behind it are impressive," said Miriam Sjoblom, analyst with Morningstar Inc. in Chicago. "Their research process is robust and sound, with demonstrated expertise domestically and abroad that makes sense for one of these new wide-ranging global funds."