Monday, February 2, 2009

Saputo 2

As I said on Friday, I will review today what the analysts are saying about this stock (TSX-SAP). I will update my spreadsheet with the figures from analyst’s reports and current stock prices. I have included estimates for 2009 and 2010. However, do not forget that these are just estimates, and can therefore be very wrong. First, I looked at insider buying and selling. There is lots of insider selling, but they are all option, so this means nothing.

The first thing I want to note is that the Globe Investor site gives this stock a 4 star rating. In looking at the ratings for this stock, they range from Strong Buy to Hold, with lots of Buy and Hold ratings and few Strong Buy ratings. The mean rating is a Buy. (See my site for information on analyst ratings.)

Because the price of milk and milk products has dropped significantly, it is not expected that Saputo will make more earnings this year than last. However, it is expected that profitability will return for 2010. This stock is considered to be a dividend paying growth stock, so usually the Graham Price is higher than the Stock Price. However, with the current bear market, the Stock Price has moved closer to the Graham Price. The dividends have grown just under 17% this year. This a good growth considering that many stock have cut back on dividend increases.

The good indicators on the price of this stock are the P/E at 14 is lower than the 5 year average of 18; and the yield of 2.8% is higher than the 5 year average of 1.8%. With the second quarterly results, the Asset/Liability Ratios are still very good. The only negative, again, is the Accrual Ratio is rather high.

Looking at the charts, this stock has done better than the TSX and the TSX Consumer Staples Index (of which it is a part) over the last 3, 5 and 10 years. For the past year, this stock has done worse than the TSX Consumer Staples Index, and for any shorter period, it has done worse than both the TSX and the TSX Consumer Staples Index. I have this stock and I currently intend on keeping it as I believe that, over the long term, I will gain in income and capital gain from it.

This stock (TSX-Sap)is on everyone list. Is on the Dividend Achievers list at, the Dividend Aristocrats list at (see indices) and also on Mike Higgs’ list at

This company is a dairy processor and cheese producer in Canada and USA. Its web site is See my spreadsheet at

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 for a list of the stocks for which I have put up spreadsheets on my web site.

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