maple leaf foods
Toronto symbol MFI, is Canada’s largest food processing company. Its products include fresh and prepared meats and poultry, mostly under the Maple Leaf and Schneider brands. It also makes fresh and frozen bakery products through 89.8%-owned Canada Bread Co. Ltd.
TOROMONT INDUSTRIES LTD. $21.77 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.3 million; Market cap: $1.6 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. Toromont also makes refrigeration systems through its CIMCO division. In July 2011, the company completed the spinoff of Enerflex Ltd. (see at right). Shareholders received shares of the new Toromont and shares of Enerflex. Sales and profits keep rising...
MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is acquiring Puratone Corporation, a private company that raises over 500,000 hogs a year at 50 barns in Manitoba.
The takeover will give Maple Leaf control of 30% of the hogs used by its processing facility in Brandon,
Manitoba.The company will pay $42 million for Puratone when the deal closes in the next few weeks. To put that in context, Maple Leaf earned $30.2 million, or $0.21 a share, in the three months ended September 30, 2012. That’s down 24.5% from $39.9 million, or $0.28 a share, a year earlier.
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The takeover will give Maple Leaf control of 30% of the hogs used by its processing facility in Brandon,
Manitoba.The company will pay $42 million for Puratone when the deal closes in the next few weeks. To put that in context, Maple Leaf earned $30.2 million, or $0.21 a share, in the three months ended September 30, 2012. That’s down 24.5% from $39.9 million, or $0.28 a share, a year earlier.
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MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is acquiring Puratone Corporation, a private company that raises over 500,000 hogs a year at 50 barns in Manitoba. The takeover will give Maple Leaf control of 30% of the hogs used by its processing facility in Brandon, Manitoba.The company will pay $42 million for Puratone when the deal closes in the next few weeks. To put that in context, Maple Leaf earned $30.2 million, or $0.21 a share, in the three months ended September 30, 2012. That’s down 24.5% from $39.9 million, or $0.28 a share, a year earlier....
WYNDHAM WORLDWIDE CORP., $50.66, symbol WYN on New York, reported higher revenue and earnings in the latest quarter. In the three months ended September 30, 2012, Wyndham’s revenue rose 4.5%, to $1.27 billion from $1.21 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up Wyndham’s occupancy rate by 1.9%. Before one-time items, earnings rose 20.2%, to $1.13 a share from $0.94. The company continues to buy back its stock. In the latest quarter, it repurchased 2.6 million shares for $133 million. In all of 2011, it bought back 28.7 million shares for $902 million....
MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly makes its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. This business accounts for 60% of Maple Leaf’s revenue. The company also makes fresh and frozen bread, pastries and pasta through its 90.0% stake in Canada Bread Co. Ltd., which supplies 35% of Maple Leaf’s revenue. The remaining 5% comes from the company’s agribusiness division, which raises hogs for its processed-meat operations. This division also recycles animal by-products into other materials,such as soaps and biodiesel fuel.
Restructuring slowed sales growth
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MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly makes its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. This business accounts for 60% of Maple Leaf’s revenue.
The company also makes fresh and frozen bread, pastries and pasta through its 90.0% stake in Canada Bread Co. Ltd., which supplies 35% of Maple Leaf’s revenue. The remaining 5% comes from the company’s agribusiness division, which raises hogs for its processed-meat operations. This division also recycles animal by-products into other materials,such as soaps and biodiesel fuel.
The company also makes fresh and frozen bread, pastries and pasta through its 90.0% stake in Canada Bread Co. Ltd., which supplies 35% of Maple Leaf’s revenue. The remaining 5% comes from the company’s agribusiness division, which raises hogs for its processed-meat operations. This division also recycles animal by-products into other materials,such as soaps and biodiesel fuel.
Restructuring slowed sales growth
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CANADA BREAD CO. LTD. $44 (www.canadabread.ca) reported that its sales fell 0.3% in the three months ended June 30, 2012, to $404.9 million from $406.2 million a year earlier. That’s mainly because it closed an older bakery in Toronto as part of a restructuring plan....
CANADIAN IMPERIAL BANK OF COMMERCE $77 (www.cibc.com) earned $2.06 a share in the three months ended July 31, 2012. That’s up 6.7% from $1.93 a year earlier. Loan demand remained strong in Canada, and profits rose at the bank’s wealth management and capital markets divisions. The strong results prompted CIBC to raise its quarterly dividend by 4.4%, to $0.94 a share from $0.90. The new annual rate of $3.76 a share yields 4.9%. Buy. CAE INC. $10 (www.cae.com) has won contracts to build flight simulators and upgrade other pilot training equipment for military clients in the U.K., India and Oman. In all, these deals are worth $55 million. That’s equal to 3% of CAE’s annual revenue of $1.9 billion. Best Buy. CANADA BREAD CO. LTD. $44 (www.canadabread.ca) reported that its sales fell 0.3% in the three months ended June 30, 2012, to $404.9 million from $406.2 million a year earlier. That’s mainly because it closed an older bakery in Toronto as part of a restructuring plan. Earnings per share rose 12.4%, to $1.09 from $0.97. However, Maple Leaf Foods continues to hold 90.0% of Canada Bread’s shares. That hurts the stock’s liquidity. Hold.
MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 139.5 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly makes its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. Through 90.0%-owned Canada Bread (see right), the company also makes fresh and frozen bread, pastries and pasta.
Maple Leaf continues to restructure its operations, including simplifying its product lines and increasing its focus on its most profitable foods. The company is also installing a new computer system that will give its managers more timely information and help them make better decisions.
These measures should raise Maple Leaf’s gross margin (gross profits as a percentage of sales) from 7.7% in the past 12 months, to 12.5% in 2015.
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Maple Leaf continues to restructure its operations, including simplifying its product lines and increasing its focus on its most profitable foods. The company is also installing a new computer system that will give its managers more timely information and help them make better decisions.
These measures should raise Maple Leaf’s gross margin (gross profits as a percentage of sales) from 7.7% in the past 12 months, to 12.5% in 2015.
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Maple Leaf Foods and its Canada Bread subsidiary are starting to benefit from their recent restructuring plans. We like both stocks, but Maple Leaf offers better value. At its current price, its stake in Canada Bread is worth roughly $7.45 per Maple Leaf share. That means you get Maple Leaf’s meat-processing operations, which account for nearly two-thirds of its sales, for just $3.55 a share. MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 139.5 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly makes its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. Through 90.0%-owned Canada Bread (see right), the company also makes fresh and frozen bread, pastries and pasta. Maple Leaf continues to restructure its operations, including simplifying its product lines and increasing its focus on its most profitable foods. The company is also installing a new computer system that will give its managers more timely information and help them make better decisions....