Pork shortage hurts Maple Leaf

Article Excerpt

MAPLE LEAF FOODS INC. $29 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.7 million; Market cap: $3.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.8%; TSINetwork Rating: Average; www.mapleleaffoods.com) sells Maple Leaf and Schneider fresh and prepared meats. Sales in the latest quarter fell 0.8%, to $817.5 million from $811.2 million a year earlier. That’s mainly because of a 2017 viral outbreak affecting swine. It limited the supply of fresh pork. The shortage also offset stronger sales of Maple Leaf’s other products. Earnings in the quarter fell 12.1%, to $0.29 a share from $0.33. The company aims to spur sales of other products. For example, it has paid an undisclosed sum for a stake in Entomo Farms. Based in eastern Ontario, that private company produces powder made from milled crickets, which can then be used for baking and mixing into other foods. Expanding by acquisition adds risk. Moreover, the stock trades at a somewhat high 19.2 times the company’s projected 2018 earnings of…