Investment Thesis for Pilgrim’s Pride, Corp. (NYSE:PPC)

Abstract

This working paper is an in-depth analysis of Pilgrim’s Pride, Corp. (PPC). Our analysis examines the chicken cycle, commodity prices, and the economic factors that impact Pilgrim’s Pride’s underlying business. We combine our economic analysis with our proprietary, Hanke-Guttridge Discounted Cash Flow (HG-DCF) model to assess PPC’s financial position. Instead of obtaining a single and static valuation of PPC, Monte-Carlo simulations are used alongside our HG-DCF model to reveal the distribution of probable free cash flows and future earnings. Management compensation is also analyzed in depth to evaluate whether or not management is incentivized to act in the best interest of the shareholders. Our goal is to foster reasonable investment decisions by allowing readers to understand Pilgrim’s Pride’s business plan and financial health.