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.
Some investors worry that Washington’s $700 billion bailout of the banking industry is going to fall apart, and that this will lead to a rise in gold and a drop in the stock market. We think the bailout will go through. The only obstacle to it is the political bickering and posturing that is bound to go into a highly visible effort like this, all the more so just prior to a presidential election. There is always a possibility that the market will move lower from here. Meanwhile, gold will stay volatile. But we still feel stock prices will hit bottom over the next month or two, then move up for six months or more. ENCANA CORP. $71.22, Toronto symbol ECA, now plans to expand its refinery in Roxana, Illinois. The company and ConocoPhillips each own 50% of this facility. This upgrade will increase the plant’s total capacity by 16%. It will also let the plant handle increasing production from EnCana’s oil sands operations in Alberta....
Maple Leaf Foods Inc. $11 (Toronto symbol MFI Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.9 million; Market cap: $1.4 billion; SI Rating: Average) 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. Maple Leaf is currently in the middle of major restructuring that will see it focus on more-profitable packaged meats and meals. In the past two years, it has sold its animal feed operations and scaled back its hog-processing operations. The company is also investing heavily in new plants and equipment. It will probably take Maple Leaf another few months before it starts to realize the full benefits of its plan. Meanwhile, sharply higher prices for grains and energy continue to hurt its profitability. Exports account for about 30% of the company’s sales, and the stronger Canadian dollar also makes its products more expensive outside of Canada.Maple Leaf’s sales rose from $4.2 billion in 2003 to $5.6 billion in 2005, but fell to $5.2 billion in 2007. Earnings before unusual items grew from $0.04 a share (total $83 million) in 2003 to $0.59 a share ($201 million) in 2005. Earnings fell to $0.38 a share ($173 million) in 2006, but improved to $0.51 a share ($199 million) in 2007....
Maple Leaf Foods now owns 89.8% of subsidiary Canada Bread. Despite Canada Bread’s recent drop due to lower second-quarter earnings, it still accounts for a high 98% of Maple Leaf’s market value. That means you can buy Maple Leaf’s core meat processing business, which provides 70% of its total sales, for less than $0.30 a share. We feel Maple Leaf’s meat businesses and brands have a lot of enduring value. The recent cost-cutting plan should also improve the profitability of these operations. MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.9 million; Market cap: $1.4 billion; SI Rating: Average) 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. Maple Leaf is currently in the middle of major restructuring that will see it focus on more-profitable packaged meats and meals. In the past two years, it has sold its animal feed operations and scaled back its hog-processing operations. The company is also investing heavily in new plants and equipment....
Two of our long-time recommendations — Transalta Corp. $37 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 199.0 million; Market cap: $7.4 billion; SI Rating: Average) and...
MAPLE LEAF FOODS INC. $8.75, Toronto symbol MFI, moved down again this week after it expanded its recall of meat products that may contain listeria bacteria. Maple Leaf has now recalled all of the over 220 products produced at its Toronto plant, instead of the 20 or so that it first identified as possibly containing the bacteria. There is no evidence of listeria contamination at the company’s 22 other facilities, which continue to operate normally. Maple Leaf is working with federal food safety officials to fix the problems at the Toronto plant. It will not re-open the plant until it completes its investigation. The company now estimates the recall will cost it $20 million. To put that in context, Maple Leaf lost $9.4 million or $0.07 a share in the three months ended June 30, 2008 due mostly to restructuring costs. The company also faces several class-action lawsuits....
MAPLE LEAF FOODS INC. $9.80, Toronto symbol MFI, fell 10% this week after it temporarily closed a plant in Toronto due to possible contamination of packaged meat products with listeria bacteria. The closure of the plant should give Maple Leaf time to identify the source of the problem and fix it. The company is also recalling all products produced at the plant since June 2, 2008. Maple Leaf’s swift and comprehensive action should limit any permanent harm to its reputation. However, the company will probably face the customary class-action lawsuit. Maple Leaf Foods is still a buy for long-term gains....
MAPLE LEAF FOODS $13 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 127.0 million; Market cap: $1.7 billion; SI Rating: Average) owns 88% of Canada Bread Company. This investment accounts for 91% of its market value....
When a company’s assets are ignored or hidden, the stock often trades for less than it’s really worth — so you get to buy at bargain prices. Here are two stocks that have lagged the market. Unlocking their hidden assets could lead to big gains. TORSTAR CORP. $17 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.7 million; Market cap: $1.3 billion; SI Rating: Above average) gets 70% of its earnings from newspapers. This includes The Toronto Star, the biggest daily paper in Canada, and a top choice for advertisers. Torstar has expanded its Internet properties in the past few years, which helps cut its exposure to declining newspaper circulation....
CANADIAN PACIFIC RAILWAY LTD. $69.08, Toronto symbol CP, fell 4% this week as the slowing U.S. economy prompted the company to lower its earnings forecast for 2008, to $4.50 a share from an earlier estimate of $4.70. Revenue in the three months ended March 31, 2008 grew 2.7%, to $1.15 billion from $1.12 billion a year earlier. Higher volumes of grain, fertilizers and industrial goods helped offset lower shipments of lumber and automobiles. Earnings before unusual items fell 3.8%, to $0.75 a share from $0.78, due to severe winter weather, rising fuel costs and foreign exchange losses. The higher costs pushed CP’s operating ratio (regular operating costs divided by revenue – the lower, the better) up to 82.7% in the latest quarter from 79.5% a year earlier....
IMPERIAL OIL LTD. $55 (Toronto symbol IMO) continues to ration gasoline deliveries to its 532 Esso gas stations in Western Canada due to problems at its refinery in Edmonton. The company is importing and buying fuel from other suppliers as it repairs the plant. It’s unlikely the problem will have a material impact on its earnings. Best Buy. MOLSON COORS CANADA INC. $52 (Toronto symbol TPX.B) moved down after the company said it will delay further share buybacks or dividend increases until after it determines the costs of its deal to merge its operations in the U.S. with those of rival brewer SABMiller plc. However, cost savings from the merger will help the company cope with rising prices for barley and hops. Buy. CANADA BREAD CO. LTD. $71 (Toronto symbol CBY) now accounts for over 95% of the market cap of parent company MAPLE LEAF FOODS INC. $13. Canada Bread is now a hold. For new buying, we recommend Maple Leaf Foods....