CHS Begins Shakeup

Agriculutural coop CHS (Cenex Harvest States) has begun a shakeup of some magnitude after the reports of a $190 million fraud was reported on 10/26/2018 which we wrote about it here.

This is of interest to many income investors as CHS has 5 series of preferred stock outstanding which have been favorites over the years for conservative investors.  While unrated, the 5 issues are typically viewed as investment grade type issues–with a 4 year $190 million dollar fraud one may have to reevaluate this point of view.

The new local news article can be found here.

4 thoughts on “CHS Begins Shakeup”

  1. I will be watching them. I owned CHSCN but had to flip out at a 50 cent profit at $25.98 the other day, when I went in bigger on LANDP when it was dropping last week.

  2. The question to ask… will CHS be around in 10 years. Will it still function as a large and strong business? I think it will, and will likely continue to pay the dividends. Sure, the value of the preferreds may take a hit (maybe) but they don’t look to be suffering much right now. Can CHS recover from the $190 million in overstatements? I think they can and will do so.

    1. Hi Dave – I agree with all you say, but am disappointed in the lack of oversight. No doubt they will be just fine.

      1. Hello Tim
        When I look at my declining issues, it seems it managerial malfeasance is a primary driver of the fall. Very difficult to evaluate that factor.

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