Saputo Inc. (SAP.TO)

A dairy producer; cheese, Nielsen milk, inputs for wholesalers, restaurants as well as branded retail. Still a small fish in a global pond, but there is potential for them to grow bigger and increase its footprint. Management, when they make an acquisition, are able to grow margins and improve everything all around. Generates a lot of free cash flow. Likes the potential for them to use their balance sheet to continue to make acquisitions globally. Dividend yield of 1.43%.

In the short run, it looks like it is rolling over. There was a lot of support in the last couple of months at around $39-$40, and is being broken today in a big way. The next area of support would come in close to the $30 area. There is probably some downside risk in the next while. In the lower $30, it would be something you would want to accumulate again. He would think about lightening up on the current strength.

Probably a stock you want to own for the long-term, but not trade around. A very well-run company and one of the biggest players in their industry. A steady, not fast-growing, business that is well-managed.

(Market Call Minute.) A little bit high on a PE basis. In the near term, he would be careful about going into this. Very, very well-managed and are setting themselves up for the long-term, but it doesn’t rate well for him at this time.

Sells cheese and milk, and continues to use its free cash flow to buy more companies. He continues to add this to portfolios, but probably not at the current prices. Has a conservative balance sheet and still has room to grow. Thinks it is going to be a long term hold for his clients.

Cheese and Milk. It just broke out. It has a fantastic balance sheet. Recent earnings caught analysts off guard. If it comes back a little big he wants to add to it.

Because it tends to be a consumer staples stock it tends to do well in the summer. The stock is currently doing something that it normally does not do. It is actually very strong in the winter time, which is encouraging. Technically it is testing the high that it made in 2015. It is getting lined up for a possible move in the summer again.

A leading dairy processor and cheese manufacturer. Global in scope, operating internationally as well as in the US. A mature industry, but they are very good acquisitors. Always priced at a premium because of its more stable cash flows and its abilities to acquire. For a good, long term investment, she would stay with this.

Cheese, Yogurt, and Dairy. 1.5% dividend, 25% payout. A 12% earnings surprise. There is a pretty good opportunity for this stock going forward and it is a safe heaven.

A consumers’ staple. Had a nice little run up in 2015, and then kind of broke down, came back and tested around $32. The action after it came off was pretty positive. A really good risk/reward here. If it broke $30, it probably means it is going down to around $25. The valuation is really compelling. Has a $38 target on it.

The chart is showing a rounded top that got accelerated. It is starting to move up. Some shorting going on. The risk reward is very good.

What he sees over the long-term is continuation of more acquisitions, more growth into new markets and a rising demand for more proteins globally. Asian economies love pizza and want all the types of food that we are eating, and he thinks that is a good thesis. They are generating a significant amount of free cash flow. The milk/cheese spread is not working in their favour. Sometimes it works for them and sometimes it doesn’t, but what they always do is use that excess cash flow and continue to be smart allocating it and growing shareholder value. Trading at 20X earnings. This company makes nonstop acquisitions and the milk/cheese spread can easily switch into their favour. Dividend yield of 1.75%.

Short. This is still expensive, so he thinks it can go lower. A lot of their earnings are still in Canada, and Canadians pay about double what the US pays in terms of cheese prices. That is probably going away with the new Pacific trade agreement.

Last quarter had disappointing results on their international operations, about 15% of their earnings. They are seeing increasing competition and pricing competition in various areas. They are in a mature area, so they grow by making acquisitions. Focusing on areas outside of North America for growth. The overall industry and competitive environment is not that great. This stock is still quite expensive and she would not be stepping in here.

(Market Call Minute) It needs to make another acquisition for the stock to take off.