Saputo = Mob Links? A closer look
Today there was news that leaked that somehow links Saputo with the Italian Mafia. As a result, the stock took a bruising and dropped a not so modest 6%.
I personally believe that the story is false and that the market beat up the stock based on the allegations. I guess at this point it's a bit of a coin flip whether the allegations are true or not. Only time will tell.
I will focus more on their earnings and their recent results:
Saputo did will in fiscal 2007. With the recent news aside, their fiscal 2008 looks very promising. In the year ending mar 31, Saputo earned $2.28 a share with operating income rose 21.1% in the big dairy divisions. Although their revenue slipped 0.5 per cent to 4 billion, the higher efficiency cut costs by 2.2% which raised the company's profit margins.
With the higher profits and excess cash flows, Saputo has continued to grow dividends year after year. I predict that they will buy back more of its shares particularly on weakness.
Saputo is among the top 20 dairy processors, with 49 plants worldwide. It has strong positions as Canada's largest dairy processor, Argentina's third-largest and one of the top five in the U.S.
Disclosure: I do not have a position in Saputo but have it on my watch list. I may buy on further weakness of the shares.
I personally believe that the story is false and that the market beat up the stock based on the allegations. I guess at this point it's a bit of a coin flip whether the allegations are true or not. Only time will tell.
I will focus more on their earnings and their recent results:
Saputo did will in fiscal 2007. With the recent news aside, their fiscal 2008 looks very promising. In the year ending mar 31, Saputo earned $2.28 a share with operating income rose 21.1% in the big dairy divisions. Although their revenue slipped 0.5 per cent to 4 billion, the higher efficiency cut costs by 2.2% which raised the company's profit margins.
With the higher profits and excess cash flows, Saputo has continued to grow dividends year after year. I predict that they will buy back more of its shares particularly on weakness.
Saputo is among the top 20 dairy processors, with 49 plants worldwide. It has strong positions as Canada's largest dairy processor, Argentina's third-largest and one of the top five in the U.S.
Disclosure: I do not have a position in Saputo but have it on my watch list. I may buy on further weakness of the shares.
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