Saputo

Looking over what I have reviewed, I could not believe I have not reviewed one of my favorite stocks, Saputo (TSX-SAP). Considering the fact that I started my purchases in 2006 and 2007 on this stock, and it has earned me a rate of return of 7.2% per year and we are in a bear market, this is nothing short of great. According to my spreadsheet, only just over 2% of the increase is coming from Dividends.

All my following figures are for the year ending at the last annual statement of March 2008. First, what I find good about this stock. The Earnings per Share (EPS) growth for the last 5 and 10 years was 8.3% and 20%. The 5 year rate is not great, but it is acceptable. The 5 and 10 years growth for Dividends was 19% and 35%. The 5 and 10 year figures for Closing Price is 21% and 14%. The 5 and 10 year figures for Book Value is 10% and 15%. The 5 and 10 year figures for Cash Flow is 5.5% and 18.9%. The 5 year figures for Cash Flow are not that good, but again, it is acceptable.

Other things to like are the Liquidity Ratio of 1.55 and the Asset/Liability Ratio of 2.45. The Liquidity Ratio is not as good as the 5 year average of 1.70, but it is higher than 1.50 and this is good. The Return on Equity (ROE) is 16.6% for a 5 year average and was 17.8% for March 2008. These are good figures. The Operation Profit Margin (OPM) is 5.75% and this is good for this type of company.

The only real thing I do not like is the Accrual Ratio, which is very high at 12.86%. Including the Financial Cash Flow in this calculation only increases this Ratio.

So, in review, most of the indicators I follow are favorable on this stock. The main one I really do not like is the Accrual ratio and this may not mean too much but I will keep an eye on it. The liquidity ratio is favorable and this is important in a bear market. Tomorrow, I will review what the analysts are saying about this stock.

This company is a dairy processor and cheese producer in Canada and USA. Its web site is www.saputo.com. See my spreadsheet at www.spbrunner.com/stocks/sap.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

I have also reloaded my index to the stock I have reviewed and it is at www.spbrunner.com/stocks/indexport.htm. If you look at my site today at www.spbrunner.com you will see that I have added a section on cooking and cook books I can recommend.