Alright reta...oh fuck, it's been a few months.., I mean apes. I'm back with a play you all can relate to...but first, here's the summary and re-introduction.
TL;DR: Dole just went public, trades cheaply vs. peers, and sells bananas, other fruits, and veggies. Apes eat all of the above. Options just opened up two weeks ago and will accelerate the multiple re-rating as institutions and apes buy DOLE and the multiple normalizes, share price rises, and we all enjoy tendie flavored bananas over the coming months/years.
About me: Some OGs (as in, pre-January mania) may remember me as the GMEdd dot com $169.42 PT guy that was invested in GME for longer than our friend u/DeepFuckingValue and made several podcasts + appearances on Bloomberg, Benzinga, etc. I shared some DD with WSB here, here, here etc...you get the fucking point. We all know how that story played out in January, many early entrants were rewarded with life-changing tendies..., alas many late entrants were also fukt by Vlad et al, such is life.
Back to the play that really ripened my banana. We're talking about a literal ape play: the world's largest producer of fresh produce, newly IPOed Dole Plc. (DOLE):
North American & European exposure to Bananas & Various Fruits & Vegetables
Share Leader in Key Categories; Growth Opportunity in Higher Margin Value-Added Produce
For those of you care about the details, dig into this excellent analysis by ValueSits laying out the entire landscape. I'll translate a few key points into ret...ape:
- Dole Plc, global #1 player in fresh produce by a wide margin, is the product of a merger between Total Produce Plc and Dole Food Company that then went public to refinance & de-lever combined entity's debt
- Upside opportunity ranges from 2x-3x current levels in 12-24 months, while downside risk appears limited, around the \~$14/share level
- Synergies expected to improve combined Dole Plc's EBITDA by \~10%, with mid single digit growth going forward. At its core this is a mispriced security, not a growth play.
So there we have it; Dole returned to public markets two months ago on the back of a merger with UK based Total Produce that has yielded an absolute King Kong-sized player, currently priced like Diddy. The IPO went poorly, trading down \~9%, and the price closed yesterday at $15.02. Why might the IPO have gone poorly?
- IPO fatigue (IPO volumes this year on track to surpass the dotcom peak of $97B, per Renaissance Capital, in particular volumes were elevated around Dole's IPO (\~$10B that week alone)
- Weak investor roadshow and IPO occurred during a quiet Summer period
- Apes were not given a lifetime supply of bananas for being part of the IPO (okay, not really)
Now Uberkikz11, you may ask, why will the price go higher? Institutional ownership is low and will rise over time as Dole will be eligible for inclusion in the Russell 2000 and S&P Small Cap 600 indices with its current \~$1.4B market cap. This plays out over the next year. Also, options trading opened less than two weeks ago, and has extremel