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Thursday, June 28, 2007
On May 2 of this year, I blogged about Darling International (AMEX:DAR),
a Texas rendering company that is now poisd to make lots of money off
the growing demand for biofuels. To refresh your memory, this
traditional rendering company takes animal fats, hides, and other
byproducts from slaughterhouses, butchers, and restaurants, and
recycles them into tallow (used for everything from soap to paint to
cosmetics), protein meal (used for livestock feed and pet food), and
hides, among other things. It also cleans restaurants' grease traps,
converting the dirty cooking oils into greases that can be reused in
other ways, as well as sells equipment to restaurants. It sells the
useable by-products to agricultural, oleo-chemical, leather and
bio-diesel manufacturers.
At the time, I was modestly bullish about Darling but found it a well-run compnay and a compelling business model, but as time goes on, I'm increasingly so. Darling has a smart business model of making money at both ends of the equation -- both getting paid for picking up restaurant grease and slaughterhouse by-products, and getting paid for creating useable recycled product from the grease and by-products. As we move ahead, we see an increase in government regulations involving waste disposal, a growth in restaurant services, and most importantly, the demand for biofuels going through the roof. All of these trends are great news for Darling, and it is poised to capitalize on them.
Darling has been around since 1882 and is now the largest publicly traded food by-product rendering company in the U.S. After the release of excellent first quarter 2007 results, Randall Stuewe, Darling's Chairman and CEO commented, "With a strong balance sheet and a management team committed to growing and improving our earnings stream, we have significant momentum going forward into 2007." I agree.
Last week, Darling fiscal year consensus EPS estimate was upped from $0.40 to $0.43.
Type of stock: A traditional rendering company that is more than 130 years old but still finding new ways to recycle animal byproducts and restaurant grease, including now into bio-fuel.
Price target: When I blogged about Darling in May, DAR was trading below $8 andI suggested picking it up. In just over a month, it is now up to $8.94. The stock is moving faster than I thought would happen and now I see a continued upwards trend through 2007. We could Darling go from $9 to $15 by the end of 2007.
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Darling International: Fatten Your Wallet with Fat Rendering?
At the time, I was modestly bullish about Darling but found it a well-run compnay and a compelling business model, but as time goes on, I'm increasingly so. Darling has a smart business model of making money at both ends of the equation -- both getting paid for picking up restaurant grease and slaughterhouse by-products, and getting paid for creating useable recycled product from the grease and by-products. As we move ahead, we see an increase in government regulations involving waste disposal, a growth in restaurant services, and most importantly, the demand for biofuels going through the roof. All of these trends are great news for Darling, and it is poised to capitalize on them.
Darling has been around since 1882 and is now the largest publicly traded food by-product rendering company in the U.S. After the release of excellent first quarter 2007 results, Randall Stuewe, Darling's Chairman and CEO commented, "With a strong balance sheet and a management team committed to growing and improving our earnings stream, we have significant momentum going forward into 2007." I agree.
Last week, Darling fiscal year consensus EPS estimate was upped from $0.40 to $0.43.
Type of stock: A traditional rendering company that is more than 130 years old but still finding new ways to recycle animal byproducts and restaurant grease, including now into bio-fuel.
Price target: When I blogged about Darling in May, DAR was trading below $8 andI suggested picking it up. In just over a month, it is now up to $8.94. The stock is moving faster than I thought would happen and now I see a continued upwards trend through 2007. We could Darling go from $9 to $15 by the end of 2007.
hilaryonstocks at 12:01:00 PM EDT Blog about this entry |
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This entry has 3 comments: (Add your own)
-
Hilary,
I would also like to thank you for the 68% gain on DAR. Love your article and Profit!
Al -
Hilary,
I couldn't agree more. I picked up some shares following your initial recommendation of this stock, and have been very pleased with the stock's performance in that short amount of time. The more I research this company, the better I like them.
I have since added to my position in this company, and am looking forward to a very profitable 2007 - and beyond.
All you investors out there - pay attention to what Ms. Kramer writes about in these columns, you'll be glad you did!
Thanks again!
Best regards,
Tim C.
Honeoye Falls, NY
7/9/07 1:39 PM