Saputo Inc. (SAP-T)

The US is their biggest market where there's overcapacity in milk-cheese, so SAP has to work through that. They used to earn 10% operating margins there, but now it's a loss. But if they recover there and continue to grow in Canada and internationally, this will look cheap. The Canadian market is more about retail, not food service in the US, so more stable with more pricing power. 

Has major operations in Europe, yet it's a Canadian company trading on the TSX. There are issues dealing with dairy and the commodity side of the business.

Lots of pressure within Canada on protected costs around dairy products. Might be an easier place for our government to give in on something, so wouldn't surprise him if our dairy protection weakens or softens a bit.

Completely unloved today. #1 in Canada, #2 in UK and Australia, #3 in USA. Pre-pandemic, very stable. Food services division hasn't really recovered, especially in the US. Exposed to commodity prices, industry capacity needs to be taken out, cost-cutting needs to continue.

Not as high quality a business as he first thought, but excessive negativity baked into the share price. Yield is 3.2%.

At 13X forward earnings and having a steady growth and margin profile over the years, we think it is getting interesting. It still has some issues to work through related to their Argentina business but this is likely getting priced in at these levels. 
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It has made progress but in the macro environment of inflation in Argentina it has under-performed.

He is not covering them right now. He is looking for extraordinary stocks priced for growth. This one is OK but there are better places to be.

He's staying away from consumer staples stocks, unless they have some real edge. With dairy products, hard to get a margin and hard to set price.

Found support at 2022 levels, which is good, bouncing off. A sign that it's OK, a 5/10 chart, proven it doesn't want to break down any more. Is it going to start going up? Best way to tell is that the last high must be taken out. If yes, it's bullish. If not, it's consolidating. Don't want last lows to be broken. In no man's land, one to watch.

Seasonality a factor in this stock - performs better in the summer. Large brand with excellent product selection. Expecting share price to go higher. Would recommend holding. $35 share price seems reasonable. 

Nothing wrong with business, but share price has been weak. Inflation and rising food prices tough on bottom line. Demand for premium brands falling recnetly, but overall a good business. Would recommend holding. Not good for capital appreciation, but safe business. 

Used to make smart acquisitions that increased margins significantly. Commodity business, as cheese prices move around. Prefers more capital light, less capital-intensive businesses than manufacturers. Bottom of the list on ROIC.

Has had commodity pressures lately with inflation and rising costs. Cost inputs have reduced margins, but is expecting improvements going forward. Sector has been under pressure, but sees better days ahead. Has a strong brand. 

Lots of acquisitions. Integration and supply-chain issues have largely been solved. Buy at these levels and you'll do well over the next several years. Well run.