SAP
SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 204.6 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.saputo.com) earned $0.54 a share in its third quarter, which ended December 31, 2010. That’s up 8.0% from $0.50 a year earlier. Revenue rose 3.0%, to $1.54 billion from $1.48 billion. The improved results were mainly due to higher cheese sales and prices in the U.S. As well, the company raised its selling price for milk in Argentina. However, a third of Saputo’s revenue comes from outside Canada. The Canadian dollar’s strength against the U.S. dollar and the Argentinian peso hurt the contribution of Saputo’s international sales. Saputo is a buy.
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. Saputo is one of the stock picks we analyze in our Successful Investor newsletter. In its third quarter, which ended December 31, 2010, Saputo earned $111.8 million, or $0.55 a share. That fell short of the consensus earnings forecast of $0.57 a share. Even so, the latest earnings are up 7.2%, from $104.3 million, or $0.50 a share, a year earlier. The company reported revenue of $1.54 billion in the latest quarter, up 3.0% from $1.48 billion....
EMC Corp., $24.54, symbol EMC on New York (Shares outstanding: 2.1 billion; Market cap: $50.4 billion; www.emc.com), designs, makes, sells and supports data-storage hardware and software. EMC also provides related services for data storage across networks. The company also owns an 84% stake in VMware Inc. (symbol VMW on New York). EMC’s outlook looks positive for the long term. That’s because the amount of data that needs to be managed and stored continues to grow. As well, more servers are using virtualization technology. That lets companies spend less on equipment and electricity, and makes their networks more efficient and easier to manage....
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....
SAPUTO INC. $37 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 206.3 million; Market cap: $7.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) has fallen from its recent peak of $40 in November 2010. That’s mainly because possible listeria contamination forced it to recall cheese produced at one of its Quebec plants. The same bacteria forced Maple Leaf Foods Inc. (Toronto symbol MFI) to recall meat from its Toronto plant in 2008. However, this recall is much smaller. As well, there have been no reports of illness, so Saputo will likely not have to pay a large class-action settlement, as Maple Leaf did. Saputo continues to grow by purchasing other firms and assets. It is particularly interested in buying dairies in the U.S. and Australia. Growing by acquisition is more risky than internal growth, but Saputo has a long history of cutting costs at its new businesses....
ISHARES MSCI GERMANY FUND $23.40 (New York Exchange symbol EWG; buy or sell through brokers) is an ETF that aims to track the stocks in the MSCI Germany Index. This index aims to replicate the performance of 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership. The fund’s top holdings are Siemens AG (engineering conglomerate), 10.3%; BASF (chemicals), 7.3%; Bayer (diversified chemicals), 6.8%; Daimler AG (automobiles), 6.6%; E.ON (energy), 6.2%; Allianz (insurance), 6.2%; Deutsche Bank AG, 6.0%; Deutsche Telekom, 4.7%; SAP (software), 4.5%; and RWE AG (energy and waste disposal), 3.5%....
TORONTO-DOMINION BANK, $72.23, Toronto symbol TD, fell 4% this week, even though the bank reported higher revenue and earnings in its 2010 fiscal year, which ended October 31, 2010. Revenue rose 9.6%, to $19.6 billion from $17.9 billion in fiscal 2009. Earnings rose 10.9%, to $5.2 billion from $4.7 billion. Earnings per share rose 7.9%, to $5.77 from $5.35, on more shares outstanding. These figures exclude unusual items, such as costs to integrate the recently purchased South Financial Group, Inc., which operates bank branches in Florida and the Carolinas. On this basis, the latest earnings fell short of the consensus estimate of $5.81 a share. The bank continues to set aside less money to cover bad loans. That’s the main reason why earnings at TD’s retail-banking business rose 53.7% in the U.S. and 25.2% in Canada. Earnings from wealth management rose 7.4%. However, earnings from TD’s trading business fell 23.8%, due to lower trading volumes, a drop in underwriting activity, and fewer gains from its investment portfolio....
The quality of exchange-traded funds (ETFs) varies widely. All too many exist to tap into popular, but risky, themes and fads. So you need to be highly selective with your ETF holdings. ETFs offer very low management fees. In addition, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. Here are five foreign ETFs we like:...
Cisco Systems Inc., $24.56, symbol CSCO on Nasdaq (Shares outstanding: 5.6 billion; Market cap: $137.1 billion; www.cisco.com) is a leading maker of hardware and software that links and manages computer networks. The company’s hardware includes routers, local-area network (LAN) and asynchronous transfer mode (ATM) switches, and dial-up access servers. (Servers are computers that manage shared files or programs on a network.) Cisco’s Internet Operating System (IOS) software ties these products together, delivers network services (which interconnect and move information between networks) and lets programs run on networks. Cisco gets about 45% of its revenue from overseas customers. In its 2010 fiscal year, which ended July 31, 2010, Cisco’s revenue rose 10.9%, to $40.0 billion from $36.1 billion in fiscal 2009. The improving economy has prompted many businesses to update their networking equipment. Excluding one-time items, earnings rose 18.6%, to $9.4 billion from $8.0 billion. The company bought back 325 million shares during fiscal 2010, at a cost of $7.8 billion. Because of fewer shares outstanding, earnings per share rose 19.3%, to $1.61 from $1.35....
The stock market downturn of 2008/2009 renewed investor interest in food stocks. That’s because food is a necessity of life, and food producers’ shares are much less volatile than those of cyclical companies, such as resource firms. To increase your returns and cut your risk, you should focus on food makers with strong brands, such as the three we analyze below. The popularity of their brands makes it easier for them to launch new products and expand their market shares. As well, all three have strong balance sheets that are letting them make acquisitions and build new plants. However, only two are buys right now. SAPUTO INC. $35 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 207.9 million; Market cap: $7.3 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.8%; SI Rating: Average) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also makes snack cakes and tarts. Aside from Saputo, its main brands include Neilson, Stella and Dairyland. The company also has operations in the U.S., Argentina and Europe....