March 11, 2004
NUT: Investor’s Go Nuts

On what was a down day for the markets yesterday, NUT was the top performing US stock (+15.49%). Investor’s bid up NUT shares following a better than expected 2003 earnings report and a 2 cent increase in the partnerships quarterly dividend.

After speaking with NUT President Dennis Simonis in early 2004 we speculated that Mauna Loa - which laid off workers in late 2003 - was still performing poorly. However, this has not proven to be the case. Rather, Mauna Loa ended 2003 on a strong note, which led to an 18% increase in prices paid to NUT for its nuts in 2003.

Before yesterday’s run-up NUT was yielding 3.15%.  Following the spike in share price the forward yield – assuming 5 cents/share per quarter can be maintained – remains an attractive 4.5%.  Although not against taking profits in around the $5.00/share area, we continue to believe that NUT is an attractive company to accumulate on weakness for the long-term.

Note of caution:   There is no guarantee that 2004 will end as strongly as 2003 did. Historically NUT’s fourth quarter is the strongest. 

Note of interest: NUT continues to post increases in farming contract revenues.  Farming revenues will likely (as they did in 2003) outpace revenues received from Mac nut sales during the company’s weakest operating quarters (1Q and 2Q).  The company has not posted a profit in either 1Q or 2Q since June 2000.