# SAPUTO SAP.TO



## Faramir (11 mo ago)

Well have a small position in Saputo rather surprised that it was having such a hard time getting off the ground. Albeit this last week it has outperformed the US stock markets that have really tanked, which makes me think it is a bit of a safety play in a volatile environment. Trying to decide if I cut and run once I get back to break even?


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## londoncalling (Sep 17, 2011)

Welcome to the forum @Faramir. there is already a dedicated thread for this stock here which may help you with deciding what to do with your position in Saputo. Perhaps a mod can merge the two?

Saputo Inc. (SAP.TO) | Page 2 | Canadian Money Forum

I initiated a position a month ago so I am a bit biased in my opinion and would suggest that you hold.  Without knowing the reasons why you bought the stock it will be difficult to determine what the best course of action is for you. If you could expand upon your original post it may be helpful. How long have you held? Why did you buy originally? What would you do with the proceeds? How does this align with your Investment Policy statement etc.

I am going to be quite bold with my next statement so do not take offense. The same statement was made to me a number of years ago and it caught me off guard at the time.

Nobody besides you knows or cares what your break even point is for the stock. The stock should be evaluated for its future expected return and if you feel that you can find better returns elsewhere sell. 

I agree that Saputo should be a safe haven from the current volatile market which is one of the main reasons I initiated my position. I also felt it was undervalued. I think there is more upside here than downside but only time will tell.


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## like_to_retire (Oct 9, 2016)

Faramir said:


> Well have a small position in Saputo rather surprised that it was having such a hard time getting off the ground. Albeit this last week it has outperformed the US stock markets


I've owned Saputo for a long time as one of my Consumer Staples. It's certainly well managed, but they've had a hard go the last 5 years or so with the effects of liberalizing international trade and waning support for supply management in the dairy sector. I've read many times that the leadership at Saputo believes that open markets will bring more opportunity for further growth, but what else would we expect them to say? 

The COVID situation hasn't helped much as evidenced by the recent quarter results, but the company says it faced labour shortages, supply chain disruptions and inflationary pressures on dairy ingredient market prices.

Total return on SAP is around 10% YTD, so not too bad and they pay a middle ground dividend of about 2.3%. They always seem to increase it every year with a ten year dividend growth rate is about 8%. There aren't a lot of Consumer Staples that I like (I hold MRU, ATD, NWC, SAP), so I won't be getting rid of it or any of my others.

I don't think it's wise to compare it for a single week against US stock markets?, but I would consider it a hold. 

ltr


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## Faramir (11 mo ago)

londoncalling said:


> Welcome to the forum @Faramir. there is already a dedicated thread for this stock here which may help you with deciding what to do with your position in Saputo. Perhaps a mod can merge the two?
> 
> Saputo Inc. (SAP.TO) | Page 2 | Canadian Money Forum
> 
> ...


Thank you for your input and I appreciate we all have different investing goals so of course all those variables you mentioned matter. My choice right now is between holding or getting back to a cash position. Yes I understand what matters is the fundamentals of the company. I am one of those nervous nellies who wants to take a profit and move on. So not really a long term strategy. Especially since I consider the broad markets as insanely over valued.


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## londoncalling (Sep 17, 2011)

I appreciate you not taking offense to the bluntness in my post. Sentiment/psychology is often our biggest hurdle. I agree that certain sectors of the market are overvalued and we seem to be experiencing a lot of sector rotation as part of that volatility. Tech was a key driver for the markets during the pandemic and saw a big correction. It could rebound or it could still be overvalued. Industrials (the DOW) is experiencing a lot of downward pressure. For some that creates fear and for others it is an opportunity. If one has a written plan and target allocations this helps alleviate the fear. Nobody likes to see a huge gain evaporate. Nobody wants to see their stock price drop while others rise. It's always best to stay the course when you are unsure. Not an easy thing to do. Deciding to buy is easy. Knowing when to sell is much harder. If you are planning to hold longer term there is no reason to sell. If nothing has changed with the company aside from the price no reason to sell. Risk assessment profile are great tools in theory and worth taking but nothing does a better job of testing our risk level than market volatility and a bear market.


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## Faramir (11 mo ago)

Thanks londoncalling. I'm new here but the people here seem pretty level headed. No one appears to be a CNBC viewer that wants to talk up the markets like we are all idiots. I freaking hate Jim Cramer but I think he is with Bloomberg these days.


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## londoncalling (Sep 17, 2011)

Saputo Reports Fourth Quarter and Fiscal 2022 Results (tmx.com)

I listened to the conference call today and didn't hear anything detrimental. Inflation, supply chain and labour shortages seem to be ongoing headwinds which has been the theme for many companies in 2022. Operations seem to be fine outside the US and outlook is positive for 2023. The company sees growth opportunity in Australia despite strong competition. I had an ongoing order in place which I may adjust upwards this week to fill out the position.

Added: The Quarterly report is not yet posted on their website but will take a closer look once it's up.


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