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Sysco Corporation Message Board

  • einat_avi einat_avi Dec 22, 2005 12:28 PM Flag

    Thoughts from a former analyst

    Howdy people,

    I'm new to this board (my first post).
    I'm a former analyst from Down Under (G'day!)whose investment style is a cross between Buffet & O'Shaugnessy. I trawl US markets looking for value and invested in SYY today.

    For those who are interested - here's my rationale:

    (1) Strong free cashflow per share - 2.03
    (2) Price / Sales: 0.66 (GREAT value!)
    (3)Consistent EPS Growth: 0.88, 1.01, 1.18, 1.37 and 1.47
    (4)Long Term EPS growth (10-yr average) � 259%
    (5)ROE: 34.1%
    (6) I view companies with minimal analyst coverage favorably - it means that the rest of the market may be hardly aware of the 'undiscovered gem'. SYY is only covered by 6 analysts.
    (7) It has low debt and and sufficient FCF to support growth.

    If your focus is value investing for the long-term, and not trading then IMHO SYY represents great value.

    Happy Hunting,


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    • Thanks to both of you who replied. Good points from each of you. Sometimes, with call options, a narrow trading range can be useful, as I can see you know. To clarify, I don't deliberately buy dogs. Call options just provide some insurance and added income.
      Again, thanks.

    • <<Syy is dead money. Invest in small caps, semis and gold. This is crap. >>

      I'm all for the small caps and actually trade mostly small caps. It might be a little late to be chasing gold, atleast I keep telling myself that every day as gold stocks keep climbing. Semis? I know em and I love them. My favorite sector. But it's late in that rally also and now you best have the right pick or it could be costly with earnings coming up soon.
      SYY dead money? That really didn't hit me until I tried to think of an argument for it. You're right, it probably is. Energy prices are going to hold it back. I wouldn't have thought that had I not recieved my electric bill today and saw a 40% increase over last month. OUCH!
      We're still dining out tonight but it's one of the cheaper restaurants that Sysco sells to.
      I'm holding SYY for $37.50 no matter how long it takes. At that point I'll either put a real tight stop on it or try to sell as close to $38.00 that I can. It does kinda suck having dead money sitting here while most my other picks are doing well but one of my semi stocks XXIA has stalled also.

      Take a look at the RSTO chart. I got stopped out on that dragonfly yesterday. One more fricken day was all I needed. That would have gone real well with my RHEO today.

      Good luck all.....js

      P.S. The chart would be looking good on SYY if the market wasn't as strong as it's been the past two days. Then again, this is the time we're supposed to be buying. The bottom?

    • if your looking to sell calls you need a more volatile industry. May I suggest energy you could sell out of the money calls on vlo, swn, btu, cop, many more and get a premium.

    • I followed the same path a year or two ago and bought at 32.5 more or less. It did go up between 15 and 20% but it tanked again. I haven't seen any top line earnings growth since I bought the thing.

      If your usual course of action is to buy and hold dogs (I do it a lot myself), I think it is still a strong buy signal. I would just urge you to keep a close eye on taking profits and take a hard look at the numbers. The analysts seem to inflate them a lot. I have no idea where anyone gets the idea that earnings are going to grow 15% in a rising cost environment. That is a lot of people eating at Wendy's.

    • Don't everyone jump on me for my ignorance, but I hadn't even heard of this company before today, and then only because a link on the CNN home page directed me to someone writing about battered stocks with potential. He basically says: look, here are all the dogs, they can't get much worse and might get better. About Sysco he says: "But Sysco, the largest distributor of food to restaurants and institutions, is projected to increase earnings at a 15% compound annual rate over the next five years." This suggests that, for a conservative portfolio, buying some shares at 31+ and selling August calls for .70 and thereafter would generate a sort of stodgy but stable income. So now...should I take a punt on this or what?

    • If you haven't been in gold and small caps for the last couple of years, its probably too late.

    • this stock is covered by 12 analysts. Just another example of why we are to do our own due diligence.

      • 1 Reply to stumondo
      • Stumondo,

        In the past 24 months, the following brokers issued reports on the company:

        (1) JP Morgan
        (2) UBS
        (3) FTN MIdwest
        (4) SBC
        (5) BB&T
        (6) Merrill Lynch

        The following brokers have not issued a report since July 2003, and therefore are no longer watching the ball....

        - Lehman
        - Wachovia
        - USB Piper Jaffrey
        - SunTrust
        - Banc of America
        - AG Edwards

        There's your 12 - but in all fairness - we can't include the last 6.

        Happy Hunting!

    • Welcome to the Sysco board and thanks for the info.

      Most of the poster's on this board know that Sysco is a stock you invest in for the long haul and that ultimately you will be rewarded. With Sysco now thinking globally and with the supply chain initiative looking very promising, I believe we will be rewarded sooner rather than later.

48.59-0.12(-0.25%)May 25 4:01 PMEDT