Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
As of 24 April 2023
Darling Ingredients Inc. NYSE: DAR
- Darling Ingredients is a global provider of sustainable natural ingredients and specialty solutions for the food, feed, and industrial sectors. The company’s business model involves collecting and processing animal by-products, used cooking oil, and other food waste into value-added products such as animal feed, biodiesel, and other specialty products.
- Here are the key elements of Darling Ingredients’ business model:
- Raw material sourcing: Darling Ingredients collects animal by-products, used cooking oil, and other food waste from various sources such as restaurants, grocery stores, and food processing facilities.
- Processing: Darling Ingredients processes the raw materials into value-added products such as animal feed, biodiesel, and other specialty products, using innovative technologies and sustainable practices.
- Distribution: Darling Ingredients distributes its products to customers worldwide, including feed and food producers, energy companies, and other industrial customers.
What we think are pros of business:
- Sustainability: By collecting and processing food waste and animal by-products, Darling Ingredients helps to reduce waste and promote sustainability in the food industry.
- Diversification: Darling Ingredients operates in multiple markets and industries, which can help to diversify its revenue streams and reduce its dependence on any single market or customer.
- Innovation: Darling Ingredients invests in research and development to create new products and technologies, which can help to drive growth and profitability over time. The company’s focus on sustainability and innovation also helps to differentiate it from competitors.
What we think the risks are:
- Regulatory risk: As a company that deals with waste and by-products, Darling Ingredients is subject to various regulations and environmental laws that could impact its operations and financial performance.
- Raw material supply risk: Darling Ingredients’ ability to collect raw materials is dependent on a number of factors, including weather, transportation infrastructure, and the availability of suppliers.
- Volatility in commodity prices: Darling Ingredients’ business is heavily influenced by commodity prices, which can be volatile and impact its financial performance.
Fundamentals:
- Market Cap: $9.4 Billion
- P/E : 13.18
- D/E : 0.58
- Operating Cash Flow: $580 Million Avg.
- Profit margins = 14.2%
- ROE= 20.6%
- P/FCF= 22.34
Technical for long term perspective:
Trend : Down for short term and sideways for midterms
Entry : 52-56 can be good levels to enter and DCA around 29
Target: 85
Our Final Thought:
Darling ingredients is a business that you can consider buying if you want to participate in renewable energy. This stock can be in an advantage if there is a major shift towards sustainable biodiesel production.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.