I agree, buying in low $20's a good opportunity. I would antiicpate a recover by summer to high $20's as Spring is always a good period for the company and we hope there is resolution to the war.
>> sources for what? I think youre confused.
Let me reiterate a staement you made:
"Those numbers go out the door if they are improperly booking revenue like their competitors."
I ant you to substantiate the improper bookings with evidence. That is all. All you are doing is making up a rumor.
08:07 ET Sysco Corp downgraded at JP Morgan (SYY) 26.30: JP Morgan downgrades to Neutral from Overweight, citing valuation, an expected modest deceleration in comps over the next 4 qtrs, and pricing concerns from struggling competitor US Foodservice.
debt equity is a meaningless measure of how inflated your stock is versus how much debt you have.
if SYY is crushed on accounting fraud news, SYY's debt equity will look similiar to AHO's since its stock will no longer be grossly inflated.
This is why SYY is going down.... and PFGC and a few others. All food companies do the same thing (just maybe not as blatant as USFoodservice.)
What USFood did and SYY does and PFGC is beat up the purveyors to get rebates.... nothing illegal. What USFood did is actually book the rebates as profits and when they didn't hit the quota they never took them off the books.... that is fraud, since the bottomline of the P&L never matched.
Now lets assume SYY is honest and wouldn't do this. They get rebates and post them as earnings and if they don't they take them off the books. But here is the problem..... the rebates are not profits but actually a reduction of cost of goods sold. If I'm correct due to my experience in foodservice, SYY is booking the rebates as profits. Yes, I know that it doesn't effect the bottomline of the P&L... but it effects the growth rate big time, which is what is going to crush this stock. Everybody thinks they are growing double digits.... but it is the rebates that are making it happen. When the SEC gets a hold of the rest of AHO competitors.... LOOK OUT BELOW.
My guess is looking at SYY and PFGC the number 1 and 3 foodservice providers in the country..... the news is coming real soon !!!!
OK you asked how are AHO and SYY different. Well first since you are so concerned about debt Ahold has a debt equity ratio of 2.6 meaning they have almost 3 times as much debt as equity. Sysco, 0.6.
Next growth. US Foodservice grew by aquisition over the past few years with a negative 2% orgranic growth rate. Sysco had a 7% organic growth rate. Anyone who did any due dillegence had to know that was a house of cards.
Finally I am a suuplier. I hate negotiating with both Sysco and USF Foodservice. They both beat the heck out of you for every last dime of profit. The difference is I fear the Sysco negotiation like I do the Walmart negotiation, because they are good. I fear US Foods becuase they just don't make sense with the demands and threats.
So yeah, they are really both a like. They sell food. That is it.
vcmav and daguvanuh (maybe some poster, maybe not) both are post plenty a negatives and innuendeo(sp) on AHO [and just checked, Fleming]. They don't show up on all the boards together, but on quite a few.
If SYY goes down much further do to the sector woes, I'll be increasing my position.
[disclosure: I work for sub of SYY and own a few [VERY few] shares, also have a small position in AHO, bought near their lows as a speculative gamble].
<<For a company than earns over $1.2 BILLION before interest >>
$1.2bb by whos standard?
AHO made about the same by dutch standards, but they made 80% less by US GAAP standards.
Those numbers go out the door if they are improperly booking revenue like their competitors.
At any rate, the parallels between SYY and US Food Service are pretty hard to ignore.