SFD operates as a producer, manufacturer, marketer, seller & distributor of a variety of fresh pork and processed meat products both domestically and in Canada, Poland, France, Japan & Mexico. For the 39 weeks ended 1/28/01, revenues rose 17% to $4.39B. Net income totaled $170M, up from $46.6M. Results reflect an increase in average unit selling prices in the Hog Production Group and the inclusion of a $76.5M gain on the sale of stock.

March 22, 2001

Smithfield Foods is a vertically integrated pork and processed meat producer. The company offers hog production and fresh pork products such as hams, hot dogs, loins and ribs. Shares of SFD have been moving higher over the past year after hitting a low of $14.88 on 2/24/00. The stock traded to a 52-week high of $33.30 on January 2nd after Smithfield lost a bidding war with Tyson Foods (TSN) over the acquisition of IBP Inc. (IBP). Since then, SFD has traded in the $27-$33 range. The stock is currently on a run from a relative low of $27.85 on March 1st. With that said, we believe that SFD could be ready to break through its trading range as the US pork industry benefits from the European livestock disease crisis that has wiped out most of the European pork products. From a technical standpoint, support is the 5-dma at $32.02 with additional support at Thursday’s intra-day low of $31.20. Resistance is Wednesday’s intra-day high of $32.80 and then the January 1st intra-day high of $33.30. Look for entry points on a bounce off of $32.02 or a move above $32.80 on volume greater than 130,000 shares by noon. We plan to set stops at $29.75 to limit potential losses.

Picked on March 6th @ $32.25
Change since picked +0.00
Stop Loss @ $29.25

March 29, 2001

Smithfield Foods has posted gains in four of the past five sessions following an article in BusinessWeek about the economic effects of the European livestock crisis. On Thursday, shares of SFD hit an all-time high of $38.10 before pulling back to a close of $37.85 on volume of 1.08 million shares. SFD has made five consecutive higher lows on above-average volume, so the stock could maintain its upward trend as long as the volume remains heavy. In the meantime, support is Thursday’s intra-day low of $37.10 with stronger support at $36.67, Wednesday’s intra-day low. Resistance has shown up at Thursday’s intra-day high of $38.10 and then the $40 mark. Traders may consider entry points on a bounce off of $37.10 or a breakout above $38.10 on volume of at least 180,000 shares by noon. We are leaving our stops at $35.25 to protect gains.

Picked on March 22nd @ $32.25
Change since picked +5.60
Stop Loss @ $35.25

March 27, 2001

Smithfield Foods, Inc. has been moving higher thanks to Europes Foot-and-Mouth epidemic. On Monday, shares of SFD traded to an all-time high of $37.22 and a record close of $36.37 on heavy volume of 1.82 million shares, five times the daily average. On Tuesday, the stock closed at a new all-time high of $37.34 on volume of 1.08 million shares. SFD has gained momentum after a major breakout on Friday, so it could trade even higher as the market recovers. For now, support is at Tuesday’s intra-day low of $36.20 with additional support at $35.50, the 11/25/97 intra-day high. All forms of resistance have been taken out over the past two days, so new resistance may come in at $38 or the $40 mark. A bounce off of $36.20 or a breakout above $38 on midday volume greater than 180,000 shares may be possible entry points. We are bumping our stops up to $35.25 to lock in profits.

Picked on March 22nd @ $32.25
Change since picked +5.09
Stop Loss @ $35.25

March 25, 2001

Smithfield Foods, Inc. gapped up on Friday morning after First Union reiterated its “Strong Buy” rating and its $36 price target on the stock. Shares of SFD traded to a new 52-week high of $34.87 before pulling back to a close of $34.77 on heavy volume of 874,000 shares. The stock has broken out of its trading range on three times average daily volume so it could be ready to hit a string of new highs. The European foot and mouth livestock crisis may have also contributed to the rally, as the story continues to make headlines. In fact, Smithfield was specifically mentioned in Business Week as a benefactor to higher hog prices. Going forward, support has moved up to Friday’s intra-day low of $33.53 with stronger support at $32.81, the 5-dma. Resistance is now Friday’s intra-day high of $34.87 and then possibly $36 or $37. Traders may consider starting new plays on a bounce off of $33.53 or a breakout above $34.87 on volume of at least 130,000 shares by noon. We are keeping our stops at $29.75 as downside protection.

Picked on March 22nd @ $32.25
Change since picked +2.52
Stop Loss @ $29.25