Saputo Inc. (Symbol SAP on Toronto) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also makes snack cakes and tarts. Aside from Saputo, the Canadian stock pick’s main brands include Neilson, Stella and Dairyland. The company also has operations in the U.S., Argentina and Europe. In its second quarter, which ended September 30, 2010, Saputo earned $125.5 million, or $0.60 a share. That’s up 32.8% from $94.5 million, or $0.45 a share, a year earlier. The company reported revenue of $1.56 billion in the latest quarter, up 5.3% from $1.48 billion. Higher cheese prices in the U.S. were the main reason for the higher revenue and earnings. Meanwhile, Saputo is recalling cheese produced at one of its Quebec plants due to possible listeria contamination. This same bacteria forced Maple Leaf Foods Inc. (Toronto symbol MFI) to recall meat processed at its Toronto-area plant in 2008. However, this recall is much smaller, and so far there have been no reports of illness. We’ll monitor how Saputo deals with the recall and update our buy/sell hold advice as necessary in upcoming issues of our Successful Investor newsletter. You can get one month free when you subscribe now. Click here to learn how.
Canadian stock picks: Saputo reports higher results
Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.