The primary reason why Pilgrim’s Pride filed for Chapter 11 bankruptcy was the burden of total debts in the amount of $1.9 billion. Some Wall Street analysts suggest that this debt burden was due to the company’s acquisition of the Gold List for $1.3 billion.
Pilgrim’s Pride also reported a one-time goodwill impairment charge of $501.4 million related to this acquisition in the fourth quarter of FY 2008.
Tyson Foods (TSN) had a debt of $2.8 billion, Sanderson Farms (SAFM) had a debt of $0.23 billion, and Hillshire Brands (HSH) had a total debt of $3.1 billion in 2008. Investors may want to consider a diversified portfolio ETF, such as the Consumer Staples Select Sector SPDR Fund (XLP), which also holds Tyson Foods (TSN) and Walmart (WMT).
The company’s cost of operations shot up higher than revenues, leading to an operating loss in the amount of $1.1 billion. Higher corn and soybean feed prices coupled with moderated chicken prices led to the company taking a loss. Read part eight of this series to learn more about this particular risk.
View more information: https://marketrealist.com/2014/11/pilgrims-pride-filed-bankruptcy/