Question

You may also find further materials

on their website and by searching the internet. Answer the following questions by 2-3 sentences

each. This is an ‘immersion’ exercise – you will likely not understand a lot of what is written about

Dean Foods, and that is OK. Have fun exploring a new topic, that’s the point of this exercise!

1) What information channels does Dean Foods use to communicate to shareholders and

market analysts?

2) What measures have market analysts used to evaluate Dean Foods stock prospects? No

need to understand all the measures, just list those that caught your eye as either

frequently used or intriguing.

3) What happened to Dean Foods over the past few years? List both changes in their

business environment and their strategy.

4) As an investor, would you buy or short Dean Foods stock?

Answer 1

1. They convey information to shareholders and analysts through their website under the investor relations tab. It has information about their stock price behavior, past financial statement, and information regarding events, etc.

2. The measures used are their stock price levels, the capital structure of the company i.e. the debt and the equity in the firm and the overall profitability of the firm which can be calculated by measures such as Return on Assets, Return on Equity, etc.

3. On July 26, 2019 they have appointed a new CEO (Eric Beringause) who will also serve as the president of the company. Very recently on September 6, they concluded their review of strategic alternatives. In the meeting, they even deliberated on the possible sale of the company in order to expand the long term shareholder value. They have also increased their liquidity (amount of liquid assets available) by increasing its senior secured credit facility to $ 350 million.

4. Looking at what the company is planning and the discussions about the company, I would think of buying the stock of Dean Foods though such an action without any proper research wouldn't probably be good. Before seriously considering about the company, I would like to perform an in-depth analysis of the company's past, present and future plans.