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"Milk Runs In My Veins"

Lino Saputo Jr. knows more than just how to make cheese. At forty-two years of age the CEO of Canada’s largest public cheese manufacturer, Saputo (SAP), has been groomed to run the family business from an age when most corporate CEO’s were still attending private schools and never knew how to get their hands dirty.

From sweeping floors to making cheese in the manufacturing division of his family operated business, Lino Saputo Jr. possesses the intimate knowledge of the people, operations and industry that’s vital in today’s competitive global landscape. Understanding the business from the “grassroots” as Saputo comments in today’s Gordon Pitts article is at times more important than the education you receive in a classroom. While many candidates for a CEO position aren’t ever considered unless they have a MBA as a minimum education Saputo, as a business, believes strongly in developing a corporate culture that breeds future sustained success in place of complicated structures. When you look at the top management running the $5 billion corporation its difficult to find anyone with formal academic business training.

If you haven’t read this article or taken time to analyze the fundamentals of Saputo I strongly encourage investors to do so. While its current valuation may be expensive in the eyes of many and the dividend yield below the minimum threshold, the company has executed on all fronts for a number of years and often flies under the radar of many investors.

Some interesting facts on Saputo:

Since 2001 the annual dividend growth rate has been over 25%
The ten year Return on Equity (ROE) has averaged 17.9%
The company currently trades above a 18% discount to its historical P/E on projected 2009 EPS of $1.65
Growth in Book Value has averaged over 11% in the past five fiscal years.

Dividends Matter did an excellent analysis on Saputo in a post published May 13th, 2008.

Disclosure: I hold common shares in Saputo
 

 

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