The Holy Grail of investing is to find a great business whose stock is trading at a great price. Alas, while that happens often enough for patient investors to stay fully invested, it doesn't happen all the time. More often than not, investors have to chose between a mix of "great company/not-so-great stock price," "not-so-great company/great stock price," and "lousy company/lousy stock price."
It is with that in mind that I say that I think SYSCO
The company's fiscal fourth-quarter results were pretty respectable, though. Adjusting for the extra week in the year-ago period, reported sales rose 5.6%, with 1% of that from acquisitions and another 1.6% from inflation. That leaves "core" revenue growth of about 3% -- better than the third quarter and the second-straight improvement in the time I've watched them as a contributor to The Motley Fool.
It should be noted, though, that sales were down without that adjustment for the extra week. Consequently, reported net-income growth of 1.5% is actually a bit better than it might otherwise appear, as that figure was not gerrymandered to account for the extra week in the year-ago period.
Even though growth (whether measured in net income or operating cash flow) was sluggish for this fiscal year, I don't believe that the company is doomed to forever be a single-digit midget in terms of growth. Not only does the company have a solid lead on the likes of Ahold's
Although same-store sales at some restaurant chains like Wendy's
Nevertheless, I'm still not a major fan of the stock at today's price. Believe me, I'm well aware that SYSCO is a favorite amongst many respected value-oriented investors and, for what it's worth, I agree that it's a great company. But I just can't get my valuation models to signal "buy" on this, and when faced with the choice of scrapping a system that's worked well for me for a long time or staying cool on SYSCO shares, I think I'll have to choose the latter.
For more tasty Takes:
- Brinker's Not on the Brink
- Wendy's Good News Combo
- Outback's Char-Grilled Quarter
- Feast or Famine at SYSCO?
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).