any insight into the fall today?
Rogers Sugar Inc. (RSI.TO)
Canuck
61 - 80 of 117 Posts
Joined
·
649 Posts
I'm waiting to see where the stock price is going... but I am interested. Gosh feels good to be back and looking at stock prices, reports, and news :chuncky:
If it hits 4, Im In!!!
While I wouldn't have minded catching the bounce this AM, I have a hard time seeing upside with this. Cash flow is draining fast and div is 100+% of earnings. Other than short term bounces I try to steer away from divs that are over 60% of earnings. This will have to be cut, sell more shares, or show us something new. Long term Rogers is a 4% yield stock.
I walked through the super market this AM and noted Rogers' near monopoly, but also see artificial and natural sweeteners such as Stevia with a significant amount of shelf space (relatively speaking.) Not that it will put R out of business by itself, but Stevia is being accepted quickly as a natural replacement at the retail and manufacturing levels.
That's the extend of my opinion, I'll leave the TA to the pros.
I walked through the super market this AM and noted Rogers' near monopoly, but also see artificial and natural sweeteners such as Stevia with a significant amount of shelf space (relatively speaking.) Not that it will put R out of business by itself, but Stevia is being accepted quickly as a natural replacement at the retail and manufacturing levels.
That's the extend of my opinion, I'll leave the TA to the pros.
RSI is a low maintenance buy and hold "cyclic" stock.
Without detailing each year (too tedious to list here), a 10 years' history (2004 to 2013 inclusive) has shown the price has gone to as low as $2.84 (low of 2009) to as high as $6.70 (high of 2012) with prices fluctuating ("the noise") mostly inbetween $4.50 to $5.50 (give or take a few pennies).
Past 11 years' dividend history from google finance (rounded to nearest or next penny):
2013=$.36 (excluding a first quarter special dividend).
'12 = .36
'11 = .34
'10 = .46
'09 = .46
'08 = .46
'07 = .36
'06 = .41
'05 = .36
'04 =1.20
Seems pretty stable up there. First quarter 2014 dividend of $.09 / share has already been declared on January 30, 2014. Doesn't look like the dividend is going to disappear anytime soon nor is the company. Stock price at the moment is $4.46 - heading back up. Warning: buy at your own risk.
Without detailing each year (too tedious to list here), a 10 years' history (2004 to 2013 inclusive) has shown the price has gone to as low as $2.84 (low of 2009) to as high as $6.70 (high of 2012) with prices fluctuating ("the noise") mostly inbetween $4.50 to $5.50 (give or take a few pennies).
Past 11 years' dividend history from google finance (rounded to nearest or next penny):
2013=$.36 (excluding a first quarter special dividend).
'12 = .36
'11 = .34
'10 = .46
'09 = .46
'08 = .46
'07 = .36
'06 = .41
'05 = .36
'04 =1.20
Seems pretty stable up there. First quarter 2014 dividend of $.09 / share has already been declared on January 30, 2014. Doesn't look like the dividend is going to disappear anytime soon nor is the company. Stock price at the moment is $4.46 - heading back up. Warning: buy at your own risk.
Joined
·
470 Posts
As someone else mentioned they appear to have a monopoly on the sugar industry. Are there really any other similar sized players that can compete with Rogers? For what it's worth I don't think our addiction to sugar and sugar products is going away any time soon. The stock did go up a bit today so hopefully it will head up back towards $5
Joined
·
3,938 Posts
^ I tend to agree. Rogers is a very large company and supplier of this very important product. Ever eat breakfast in a restaurant? Loaded with sugar. Processed food? Loaded with sugar. Sure, a growing subset of the population does try to make healthy eating choices but there will always be a demand for sugar.
I don't think anyone is suggesting Rogers is literally going under and sugar will certainly have its place, but it's a sell on my watch list and many are calling for $4.25. Still wouldn't be sweet enough for me at their payout ratio and ultimately they're going to have to do something about cash flow. Maybe I'll look again closer to $4. If not, enjoy!
Joined
·
470 Posts
I think they've had a consistent history of paying out decent dividends in the past 8 years as someone mentioned above. It's not an ideal situation they're in but Rogers is definitely good for the dividends and I consider it a 'hold'
Joined
·
45 Posts
Did anybody pick this up? I bought at $4.46 (only 120 shares, I just had ~$600 in accumulated dividends that I was trying to decide what to do with), and it's up to $4.78 now, I think the recent spike was due to Scotiabank upgrading their rating?
Joined
·
470 Posts
I agree, recent jump likely due to Scotiabank increasing their rating. Any idea what caused them to upgrade it to outperform?
Joined
·
45 Posts
It's funny how this stock jumps every once in a while when the analyst ratings change, only to fall back down to the $4.40s.
Joined
·
33,922 Posts
RSI popped into my head today, so I'm taking a fresh look at their financials and deliberately not looking at the posts above me, to hopefully get an unbiased view of it.
On technical analysis, the price looks interesting to me as it's come way off its 2013 highs, but as still rallied back above and held above its 200 day moving average for some time, which is encouraging.
Financials ~ very preliminary ~ I do waaay more research before actually buying something ~
Net incomes
2012: $30.3 million
2013: $36.5 million +20% one year
2014: $29.2 million -20% one year
The part that immediately raises my eyebrows is that gross income was pretty similar in 2013 and 2014. Why the big drop in net income? The huge drop in net income is almost entirely attributable to $6 million higher "Administration and selling expenses" (employee costs). The company spent around $3 million on management consultants for process improvement. That's a lot of money to blow on high-priced consultants.
Employee costs were $18.2 million in 2013, and $24.3 million in 2014. Now keep in mind that includes the whopping $3 million they spent on the consultants.
Their reports say they expect, as a result of the layoffs, to achieve labour savings of $5 million in 2015 [see below for why we can't rely on this estimate]. I would be more realistic and guess that they will also suffer some impediment to producing gross income (due to fewer employees) so I might adjust that number down and say that their layoffs could achieve employee cost reduction of maybe $3.5 million ... what I'm doing here is being lazy and eyeballing the net income impact from the layoffs. It's not a full $5 million benefit to net income, I'm figuring maybe 70% of that.
Do you see the problem? They've just blown $3 million on management consultants to achieve $3.5 million reduction in labour costs. And that's after their 2014 labour costs increased by $3 million, and that could have been in extra compensation to management or something, for all I know. I wouldn't be surprised actually. It's a common story for companies to lay off workers, management and executives to enrich themselves with higher compensation, and shareholders to not benefit from any of this.
It's virtually a wash!! By my projection, the impact of those labour cost "savings" and all the layoffs causes virtually no benefit to net income next year, other than the $3 million savings by not paying the consultants again They have not become more efficient on labour costs, and I suspect they just wasted a huge amount of money on those consultants. In fact earlier they projected $2 million on those consultant fees, and were wrong... they over-spent by 50% versus their projection of the consultant costs. Given that they over-spent so dramatically on the consultant costs, it's a reasonable bet that the net income savings will also under-deliver. It's pretty clear they had rose coloured glasses when looking at this whole process consultant "overhaul" experience, and it's very likely going to under-deliver. They released a bunch of headlines about productivity enhancements... very silly stuff. We're talking Office Space here.
This makes me suspicious of management, the quality of their estimates, and whether they're acting in the shareholder interest. Wasting money is never a positive thing. On top of it, they laid off 7% of their workforce for seemingly no financial benefit.
On technical analysis, the price looks interesting to me as it's come way off its 2013 highs, but as still rallied back above and held above its 200 day moving average for some time, which is encouraging.
Financials ~ very preliminary ~ I do waaay more research before actually buying something ~
Net incomes
2012: $30.3 million
2013: $36.5 million +20% one year
2014: $29.2 million -20% one year
The part that immediately raises my eyebrows is that gross income was pretty similar in 2013 and 2014. Why the big drop in net income? The huge drop in net income is almost entirely attributable to $6 million higher "Administration and selling expenses" (employee costs). The company spent around $3 million on management consultants for process improvement. That's a lot of money to blow on high-priced consultants.
Employee costs were $18.2 million in 2013, and $24.3 million in 2014. Now keep in mind that includes the whopping $3 million they spent on the consultants.
Their reports say they expect, as a result of the layoffs, to achieve labour savings of $5 million in 2015 [see below for why we can't rely on this estimate]. I would be more realistic and guess that they will also suffer some impediment to producing gross income (due to fewer employees) so I might adjust that number down and say that their layoffs could achieve employee cost reduction of maybe $3.5 million ... what I'm doing here is being lazy and eyeballing the net income impact from the layoffs. It's not a full $5 million benefit to net income, I'm figuring maybe 70% of that.
Do you see the problem? They've just blown $3 million on management consultants to achieve $3.5 million reduction in labour costs. And that's after their 2014 labour costs increased by $3 million, and that could have been in extra compensation to management or something, for all I know. I wouldn't be surprised actually. It's a common story for companies to lay off workers, management and executives to enrich themselves with higher compensation, and shareholders to not benefit from any of this.
It's virtually a wash!! By my projection, the impact of those labour cost "savings" and all the layoffs causes virtually no benefit to net income next year, other than the $3 million savings by not paying the consultants again They have not become more efficient on labour costs, and I suspect they just wasted a huge amount of money on those consultants. In fact earlier they projected $2 million on those consultant fees, and were wrong... they over-spent by 50% versus their projection of the consultant costs. Given that they over-spent so dramatically on the consultant costs, it's a reasonable bet that the net income savings will also under-deliver. It's pretty clear they had rose coloured glasses when looking at this whole process consultant "overhaul" experience, and it's very likely going to under-deliver. They released a bunch of headlines about productivity enhancements... very silly stuff. We're talking Office Space here.
This makes me suspicious of management, the quality of their estimates, and whether they're acting in the shareholder interest. Wasting money is never a positive thing. On top of it, they laid off 7% of their workforce for seemingly no financial benefit.
Joined
·
33,922 Posts
Any comments? After hovering around the $4.50 range for 18 months, the stock finally dropped lower to around $4.20.
Google says the dividend yield is now 8.5%
Thoughts? As I posted above, I'm not too confident in their management so I've been hesitant to buy. I would consider buying it if it plummeted a bit further, as I'm really not sure it's good value here.
Google says the dividend yield is now 8.5%
Thoughts? As I posted above, I'm not too confident in their management so I've been hesitant to buy. I would consider buying it if it plummeted a bit further, as I'm really not sure it's good value here.
Joined
·
113 Posts
Haha you got it!
Joined
·
915 Posts
The industry is facing a secular decline in consumption and negative sentiments among the population who are becoming more aware of excessive sugar consumption and associated maladies. Coca Cola's declining beverage sales are an indication that sugar is facing headwinds. A stable business for now but without any real prospects for growth at best you get a dividend, at worst your total return is negative because the shares decline further.
To be far with coke(product line)
There is more to the future than coca cola classic
Look at the bottle water line
I don't know a single person under 40 who doesn't buy bottle water
It amazes me but it is true
look at 7/11 the next time your in a store
half the space is water/vit water and energy drinks
That is the future Ko stock story imo
Wouldn't count ko shares out for growth
There is more to the future than coca cola classic
Look at the bottle water line
I don't know a single person under 40 who doesn't buy bottle water
It amazes me but it is true
look at 7/11 the next time your in a store
half the space is water/vit water and energy drinks
That is the future Ko stock story imo
Wouldn't count ko shares out for growth
61 - 80 of 117 Posts
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
