STOCK OF THE MONTH THE TIME IS RIPE FOR DOLE FOOD

September 30, 1991

Dole's distinctive red label has always been easy to spot on
canned and fresh fruit in the supermarket. And since July 30, when
the 140-year-old firm changed its name from Castle & Cooke to Dole
Food Co., its stock has also been highly visible on the New York
Stock Exchange, where it recently traded near its 52-week high of
$47.75. But analysts who follow Dole still see some undiscovered
value. Says David Cohen, a manager of the First Eagle Fund, a
growth-stock mutual fund in New York City: ''Dole's fruit business is
expanding rapidly, and it owns significant acreage of Hawaiian real
estate, which is not fully reflected in the stock's current price.''

Dole is worth its weight in fruit alone. It controls 22% of the
fast-growing worldwide banana market (rival Chiquita Brands has 33%).
Cohen values Dole's entire fruit business at $3 billion, or $50 a
share. In addition, Dole has 129,000 acres of prime Hawaiian real
estate, including 98% of Lanai, a mostly undeveloped 141-square-mile
island where the company runs two hotels. Michael Branca, an analyst
at Mabon Securities in New York City, estimates that Dole's real
estate is worth another $32 a share.
One uncertainty concerning Dole involves the intentions of
secretive David Murdock, the corporate raider who is chairman and CEO
and owns 23% of the company's shares. The stock surged briefly in
February 1990, after Murdock proposed spinning off the food
operations, and again in July 1990 when he put them up for sale. He
took them off the market in December, however, saying potential
buyers were unable to get financing. In recent weeks, the stock has
begun climbing again on speculation that Murdock will soon try to
sell off the real estate operations. But a Dole spokesman says
nothing has changed since December. In any case, Murdock rarely
talks to Wall Street about any aspect of his dealings -- a silence
that may have hurt the stock. ''The fact that Murdock is inaccessible
is one of the main reasons that Dole's price/earnings ratio is so
much lower than the market average,'' says analyst Branca.
Still, investors stand to gain no matter what Murdock does. If he
splits the company's food and real estate businesses, says Cohen, the
two pieces would fetch a total of at least $60 a share. And even if
he doesn't, Branca says, increased sales and higher prices for fruit
will be enough to boost Dole's earnings 15% annually for the next
three years and lift its stock price 25% to $58 over the next 12
months.

BOX: DOLE

Recent price $46.50
52-week range $47.75 to $26

Est. earnings per share P/E ratio
1991 $2.90 16.0
1992 $3.35 13.9

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