Chicago - Dain Bosworth analyst Bonnie Wittenburg said Monday she cut her rating on meat processor Thorn Apple Valley Inc to neutral from buy.
-- "Thorn Apple Valley Inc exports little meat to Asia, but demand issues for meat impact all meat companies, in our opinion, regardless of the level of exports to a given country," Wittenburg said in a report. "Any industry slowdown in exports means more meat is sitting in your local grocery store, which tends to have a negative impact on meat pricing, period."
-- Wittenburg said her "buy thesis" had been based on a turnaround theme or a potential takeover at Thorn Apple Valley.
But she added that investor psychology in Asia is expected to be a factor in this stock.
-- "The supply side of Thorn Apple Valley's picture should, in our opinion, continue to be pretty good for the next few quarters," Wittenburg said. "Hog supplies are increasing, which tends to reduce the raw material cost of pigs and enables slaughter and processing plants to run more efficiently."
-- She added that there is a worry that pork could turn into a "demand-driven market."
Press Here for Info on Setting Your Own Web Site
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii