Paul Harris, CFA
Ahold (Amsterdam Exchange)
AH-AEX
TOP PICK
Mar 16, 2007
A food services company. Almost went bankrupt several years ago over some accounting issues. Has been restructured with new management. Thinks it will do well over the next little while.
A Dutch company. European business does very well. US has been lagging. Generates a lot of free cash flow. Trades at about 8.5 X free cash flow yield. Continuing to bring down their debt level. Expecting they will move from junk bond status to investment-grade. There are a lot of catalysts for this company.
Throws off lots of free cash. Aggressively paying down their debt. Have been junk bond status but should be investment-grade bonds by the end of this year.
(A Top Pick Aug 15/06. Up 8.7%.) Had a lot of trouble over accounting scandals during an acquisition. New management is re-structuring. Generates free cash in excess of 9%. Still likes. Cheap.
(A Top Pick Oct 406. Up 11.2%.) Throws off lots of free cash flow. Is going to be upgraded to investment-grade in the next little while. Expect it will be taken over.
Have a pretty good grip on their US business and are looking to grow it. Have some cash now. Expect there will be some acquisitions. Prefers Tesco, a UK company.
(Amsterdam exchange.) Food stores. Very good company. Own a large franchise in the US and a good franchise in Europe. Margins are getting better. Better to look at things in Canada where you don't have the currency risk.