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Sysco Corporation Message Board

  • born2win_2000 born2win_2000 Oct 16, 2008 11:18 PM Flag

    Forward P/E of 11.55, stock is cheap

    I think it's a no brainer to buy/add SYY now. I've been trading SYY since 1997, each time when the market corrects (current situation might be considered a crash). It pays me a sensible dividend, so I can wait for the trade to turn into a nice profit. The dividend is important because I don't feel antsy while waiting for the stock to appreciate.

    With oil headed south, SYY should be able to reduce its transportation cost. This should fatten up the bottom line. Also SYY delivers to all kinds of restaurants and food services, so the diverse mix of customers should smooth out the revenue.

    Anyhow, this is one stock that has not failed me. I hope to ride SYY to 20% profit and collect the dividends and sleep good.

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    • The company says it will close 300 underperforming stores in addition to the 600 it already planned to close in the U.S.

      The closures could result in the loss of 6,000 jobs. Starbucks will also lay off about 700 non-store employees.

      The Seattle-based retailer said Wednesday that its net income fell to $64.3 million, or 9 cents per share, from $208.1 million, or 28 cents per share a year earlier

    • The vacant spots in turn are hurting other small businesses.
      In just a couple months, the doors on this Home Depot Expo Design Center in North Naples will close.
      "There was a couple employees that came in - they were pretty upset," Tommy Quigley says.
      Quigley manages locally owned Marsala's Pizza and Wings. He says when the big stores close, his business takes a hit.
      "That's our lunch crowd, the EXPO people basically, so its definitely going to effect us," Quigley explains.
      EXPO is just the latest business to close up shop at the Granada Shops. Linens-N-things shut its doors at the end of the year, and that's not all. Five other spots in this shopping center are empty, as well.
      "There isn't going to be much left over here so I don't know whats going to happen," Quigley says.
      Commercial real estate experts say this center isn't the only one feeling the pain, and it won't be the end of it.

    • whatever happened to Sysco's "Thong Song"?

      • 1 Reply to Jmedwick
      • Expect closings to rattle the likes of Lane Bryant, Gap, and Starbucks. It's the inevitable counterpunch to the days of retailers fighting hand over fist for market share during an era of loose credit and minuscule interest rates.

        Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers' debt loads and credit access don't figure to recover to pre-party levels for quite awhile.

        "I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."

        Retailers at risk in 2009

    • The company cites “poor overall economic conditions, declining sales at company-owned restaurants and “a challenging environment for the restaurant industry” as the reasons behind the action.

      Ruby Tuesday said it will incur costs of close to $70 million in 2009 tied to about 70 restaurant closures and declining sales.

      • 1 Reply to zekesrd
      • Here's another bright spot: We Americans are changing some of our ways -- for the better, as I see it. Sales at high-priced stores like Nordstrom (NYSE: JWN) and Abercrombie & Fitch (NYSE: ANF) are down, while sales at Family Dollar (NYSE: FDO) and Ross Stores (Nasdaq: ROST) have been up. We've been seeking out bargains and not as readily spending $100 on a new shirt.

        Pennies saved
        We've finally begun saving more, too. The Wall Street Journal recently reported that household debt in the U.S. went down a bit in the third quarter of 2008. That might not sound so impressive, but get this -- that's the first time it has decreased in more than 50 years! Moreover, savings rates have been going up and could reach 3% to 5% in the near future. For a while, we actually had a negative savings rate

    • Well, Sysco actually hedged their fiscal 2009 fuel costs (that's through June 30, 2009), so they won't be getting a break on fuel costs until July, 2009. They have a pretty good position in terms of debt, with 99% of their $2 billion debt at fixed rates averaging 5.4% and no preferred stock.

      They have treasury stock (stock repurchased on the market is worth an awesome $4 billion at todays share price) to make acquisitions that would bolster sales.

      Their sales year on year actually fell when compared to the 8% inflation in food prices, and that trend will probably continue down, with EPS year on year dropping in the 2nd and 3rd quarters.

      Sysco has pricing power because its typical customer is small. It has the ability to weather a recession because it has better returns and a better balance sheet than its competition.

      In the long run, perhaps in their fiscal year 2010, the economy should return to normal and business will pick up, and their fuel costs will decrease to reflect then current fuel costs, which should be considerably lower.

      If they can gain market share by attrition of the competition or by buying out weaked competitors, they should have a sterling year in fiscal year 2010 (July 2009--June 2010), with another rise in the dividend in December, 2009.

      A long-term secular trend, i.e., baby-boomers in their peak earning and early retirement years, will benefit this stock.

      Expect some fluctuation as bad numbers for Q2 come out. Buy at anything below $22. This is a good long-term investment, particularly if they can increase their customer base during this economic turndown.

    • With that said I can say without hesitation or reservation that SYY has been the best investment for me, having purchased my first 100 sh. in 1988 when the dividend was going UP to .07 per share. The stock splits and additional purchases along the way gives me a current cost per share around $4.16. My hope is that after the next split...and it is going to split again...that I can get my cost per share somewhere around the annual dividend...lol. By using the direct purchase program...after Dean Witter closed so many years ago...I have reinvested every dividend. What you don't have in your hand you won't be tempted to spend.
      But I digress...the management of SYY has lined their "collective" cages over the years and I never got on the bandwagon to trash them for it...after all some of them earned the money and the ones that don't you can only hope that they just fall to the roadside.
      As for investing...great PE...I've seen it as high as 30 and generally do not buy a stock over 28 PE so don't ask me about Google or Apple...although APP does have a great run going right now.
      Besides...read the Balance Sheet. OMG do you not see the Retained Earnings figure...over $5 Billion!!!! Build Baby Build!!!
      My advice...invest in SYY for the long haul.
      Get into the DRIP program. As long as SYY is buying SYY stock back we will be hanging in the $25-$35 range , maybe lower for a little bit, but once SYY is done buying back their stock........hang on ..... because I think it'll go back to the glory days of $55-$65 / share and when that happens...I'll have my MAID typing this into the message boards.
      Hope you enjoy this message it is just my view of SYY.
      For the record I have never been employed by SYY or any subsidiaries...but I am glad I took the advice of a former SYY employee back in 1988!

      • 3 Replies to leaseyes
      • http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_A/threadview?m=te&bn=54373&tid=445&mid=445&tof=7&frt=1#445

        Leaseyes OWNED!

        "Just read their comments." HAHAHA LET'S READ YOUR COMMENTS AS YOU SUGGEST


        "do not buy a stock over 28 PE" are words of the hypocrite Leaseyes. Yet, he is late to the party pumping ALGT with an outrageous PE of 44 ON A DAY IT HITS A NEW HIGH. For ALGT to have a 28 PE, that would put the stock price at $30 or $17 LESS THAN the current price of $47. Yet you are encouraging others to be the greater fool and buy what you admit should not be bought when you say "do not buy a stock over 28 PE."

        LEASEYES HAS BEEN OWNED, WITH HIS AGENDA EXPOSED!

        PROOF:


        DONT OWN STOCKS WITH HUGE PE'S! YOUR OWN WORDS, YET YOU ARE PUMPING THE GROSSLY OVERPRICED ALGT BECAUSE YOU CAME LATE TO THE PARTY AND LOOKING FOR A GREATER FOOL.


        "If you don't believe me...read the foolish comments found on this board!"
        "I only wish I had bought more when they went public a year ago!"

        LEASEYES ADMITS HE CAME LATE TO THE PARTY AND NOW HAS REGRETS. YET HE ENCOURAGES THE "READING OF FOOLISH COMMENTS FOUND ON THIS BOARD!" NO DOUBT, HE IS TALKING ABOUT HIMSELF IN A FREUDIAN SLIP.

        LEASEYES >>>> OWNED !!!!!!!!!


        hypocrite
        noun
        a person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives

        Hard to call the exact top on a pumped stock like ALGT, but easy to prove the investors in said pump like LEASEYES are lacking in intelligence. Stands to reason, you don't want to be on the side of the dumb money like LEASEYES owning ALGT, but instead the insiders who will dump like mad once they are able.

      • ten years ago, SYY was $14.

      • You are dreaming.

    • Well I'm no trader, and that said, this stock has failed me this past decade.
      It took me awhile to figure out why, then I saw the stock option grant summary, which has to be one of the biggest printing presses on the NYSE.
      Just look at it.

      and for the same reason I would never buy Oracle either.
      If they expect a higher stock price, they have to get this under control, IMHO.

    • The problem with looking at the PE is that SYY could slow a marked slowdown in sales going forward. 1. Inflation is not as strong as the last 2 years. 2. Restaurant/dining out dollars follows discretionary income. As we seem to be entering a recession, people will cut back. Buying a pizza is cheaper than eating out, even though SYY may provide the food for both, the volume and margins are higher on white table cloth restaurants. 3. Bankruptcies will spread, causing writeoffs and making SYY hesitant to extend credit.
      4. SYY has added admin people in Houston for years. These people are fixed expenses and cannot be cut back as easily as operating people. Don't ask me why, but that is how it works.
      5. Increased competition for the reduced sales dollar will hurt margins.
      6. The regional distribution centers still have not shown they are any better at saving money than the traditional format.

      I am sure more reasons will surface, but my point is that this company could really be hit during a national recession. If so, THEN would be the time to buy.

      • 1 Reply to redbelliedtoad
      • Let me explain: Inflation has benefited SYY greatly, with most of its sales gains coming from increased food prices. Actual case shipments are probably down compared with prior years. If we go to 0 inflation (SHORT TERM) then SYY sales will also slow, or go negative.
        Investors will not like this, and it will sell down even more. The 11.55 PE could then show a 15-17 handle, causing the price decline to a new PE of 10 or so, on the new earnings number, not the old estimates.

    • A parent company for R.J. Gator’s restaurants, which has 13 locations in Florida including Jupiter, Palm Beach Gardens and Boynton Beach, has filed for Chapter 11 bankruptcy.

      The filing by J&D Restaurant Holdings LLC follows the closure of R.J. Gator’s locations in Port St. Lucie and Okeechobee.

      J&D purchased R.J. Gators last year for $1.85 million, according to previously published reports.

      Owners Kevin Dalton and business partner Timothy Jeffrey planned to revive and expand the chain, which had previously filed for bankruptcy.

      The filing is the latest in a string of restaurant closings or bankruptcies affecting casual dining restaurants in South Florida, including Shells Seafood and T.G.I. Friday’s.

      J&D listed up to $10 million in both assets and liabilities, along with a list of Florida and out-of-state creditors.

      The filing attorney on the bankruptcy is Bradley Schraiberg of Kluger Peretz Kaplan & Berlin in Boca Raton.

      The company’s website says the restaurant chain had 20 units and built its reputation on providing a varied selection of Florida-style menu items amid an Everglades-themed ambiance.

    • Escalating food and operational costs, a drop in patrons and a decline in sales per check are squeezing South Florida’s mid-priced restaurants, according to restaurant brokers and operators.

      State figures show restaurant sales dropped by $266 million to $30.26 billion in the fiscal year ending in June. Sales at taverns and nightclubs dropped $129 million to $2.8 billion. Restaurants are a key economic engine, employing more than 900,000 statewide.

 
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