A Rising Tide
Despite Seaboard's operating income declining for three straight years (a fourth is likely) from $320 million in 2005 to $122 million in 2008, its book value increased 49% from $978 million in 2005 to $1.5 billion three years later. During this time, its stock hit an all-time high of $2,675 in April 2007. That was truly overvalued. Today, its current price-to-book ratio (P/B) is as low as it's been since 2003 and much less than the average of its four competitors, which is 1.6 times book value. If you give Seaboard a P/B in between the average of its competitors and its own, you get 1.3, which puts a fair value of $1,564 on its stock, 30% lower than where it's currently trading.