Saputo Inc. (SAP.TO)

Great management. They are a premium brand in North America now, so could end up as a takeover target.

This fits perfectly into her “growth by acquisition” theme and they have been very good historically at making accretive acquisitions. This is in the food sector, so it is not cyclical. Not cheap. Until they make another big acquisition, you’re probably not going to see a huge move in the stock. If this had a 10%-15% pullback, she would probably buy it.

As a value investor, he always thought this was a little pricey. However on the latest stock split, dividend increase and general performance, he is taking a serious look at this.

Came out with some news of an acquisition in Australia. Feels there are some good margin possibilities through new products. When a company comes out with news and the stock goes up, and then continues to go up, that is a very, very good sign. He would start reducing at $61 with around $59 as an exit point.

A well managed company. Primarily North American. Plowed cash flow into acquisitions outside of North America. They are great executors so they buy things cheap and improve them. To get the growth they needed the acquisitions had to get bigger and bigger, which is a slight risk. The dividend is a bit light for him.

One of the few Canadian companies that have successfully made a move into the US and are now trying to do the same thing in Australia. This has helped drive the stock in the last few months. Company has been an excellent performer over the longer-term. The real question is, what price is it able to actually pay for the milk that goes into the cheese. Interestingly enough you are starting to see something of a pickup in milk prices, certainly in Europe, partly because of the fact that the feed the farmers are putting into the cattle is going up as well. If you own, it might not be wrong to take some profits.

(Market Call Minute) Announced acquisition caused a nice run.

Expects them to continue the pattern. This company has been looked at but has not made it into the portfolios. He has 10-15 Canadian holdings and the same number in the US. He ignores emerging markets except for China.

Cheese/dairy production. This is a pretty mature market. An acquisition type story. Trying to make an acquisition in Australia and this would be positive for the company.

Have been increasing dividends at about a 10% clip for quite a while so he would expect this to continue. Good company with some good exposure. In a takeover battle for an Australian dairy company and this could be transformational as it opens up the gateway to China. He sees a bidding war starting to spiral out of control, so he would be concerned about that.

Latest report indicates the Australian takeover panel would force this company to raise its bid to $9.56 per share. Because the bid has gotten so competitive, he would not be a buyer of this one today. He is going to wait and see what happens on the acquisition and then how well the integration goes.

Takeover battle for the Australian dairy company is getting pretty heated. 3 or 4 companies are involved and given that the Australian government blocked Archer Daniels Midland (ADM-N) takeover bid for GrainCorp there is some concern. However, the issue here is that they will end up paying a lot. This is Saputo’s strategic move for a gateway into the Asian market. They may overpay but that is not their history. Also, if they win, there won’t be a lot of accretion in the short term. Also, are facing challenges in North American home market. Feels the stock is pretty fully valued.

Likes it. Successful cheese company. Good track record of acquisitions. Flat for the last little while. Doesn’t know what will happen in the short term, but will give them the benefit of the doubt. High teens PE.

Consumer staples stocks generally do well in the summer. The defensive areas of the market tend to outperform during the summer months. This one specifically tends to do well from July all the way through to September. We are now into the period of seasonal weakness. You don’t want to play consumer staples when cyclicals tend to do well. Short-term chart shows a long candlestick down, crashed through major moving averages and now looks like it can resolve itself further down.

What an excellent management team. Just did acquisition in Australia to tap into Asia. Does not rank well in his process but he thinks it will soon and then will be a great core holding. His portfolio requires an exact set of parameters.