On a valuation basis, Chiquita isn’t richly valued, though not the extreme bargain it once was, either. Set to return to profitability this year, Chiquita is trading at a little over 10 times forward earnings.
Competitor Dole Food Company, Inc. (NYSE:DOLE), which just this week received a buyout offer led by its CEO, is now valued at 20 times forward earnings. On an EV/EBITDA basis, Dole Food Company, Inc. (NYSE:DOLE) has been valued by its CEO’s offer at nearly 19 times. Chiquita trades at 12.6 times.
As an investor, it’s wise to look at a business as if you were a private owner. With this week’s Dole Food Company, Inc. (NYSE:DOLE) buyout, we have the opportunity to see exactly what a private owner would pay for the business, and use that to compare it to Chiquita.
Given the ongoing restructuring and smart management decisions, coupled with reasonable valuation, Chiquita remains an intriguing play for investors interested in the space.
The article Can Chiquita Move Higher Yet? originally appeared on Fool.com and is written by Michael Lewis.
Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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