Stock price when the opinion was issued
KPT is a $101.6M company that pays a high yield of 7.1%. Its valuation is decent, but its balance sheet has been contracting for several years now. It's considered a consumer staples name, but we are not very impressed by the fundamentals or financials. Decent growth is expected over the next two years, but we would probably wait to see if fundamentals materially improve before investing here, given its negative momentum and contracting fundamentals.
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Trading like it is a private label company, which is not the case, because they have significant branded products they sell in Canada. The previous quarter they had was pretty good, and have announced that they are raising prices. They are looking to add another private label machine and has also started another private label machine in Québec, which should improve margins. The knock against the company is that it is always next year’s story. 5% dividend yield.