Maple Leaf Foods (MFI.TO)

Sold Canada Bread, which was a good thing. Have 5 new plants that are coming on stream plus their 6 older plants, which should improve efficiencies. A big part of their business is on the protein side. There is also the epidemic in pig that is running pretty rampant in the US. It is pretty much the piglets that are getting hit so there is great diminishing potential bacon in the future through the US market. Pork prices have gone up, which is a bit of a cloud on the horizon. If you can get this under $15, it is probably not a bad buy.

He was adding on. Owned it for a while. They recently sold Canada Bread so are set to get a huge amount of cash in so they can pay down all their debt. Almost a third of the company will be in cash. They can acquire or buy back shares which they have suggested they would do. Recent capital expenditure should lead to margin improvement in the business. Then they might put the protein business up for sale.

(Market Call Minute.) Sold their 90% of Canada Bread and got a fair price. They want to concentrate on their core operations. Thinks they are heading in the right direction.

(Top Pick Nov 1/13, Up 6.98%) The near term catalyst is the announcement of them selling their bakery business, Canada Bread. He believes the buyer is the extremely logical one. These businesses come up for sale once every 100 years. Restructuring continues in the protein business. The talk of ability of increase margins is overdone. They have to sell the protein business right after the Canada Bread sale.

In the process of selling Canada Bread (CBY-T), a major holding of theirs and Canada Bread is paying a special dividend to Maple Leaf. Had a good run so wouldn’t get into it at this time but feels there is minimal downside from here.

A stock that people have loved to hate for a long time because the protein business has not performed well. He is getting increasingly more excited about this one. Have been making all the right strategic moves by selling some non-core businesses. Announced the sale of their bread business, which will fetch top dollar. Feels analysts are underestimating how much that business will go for. Protein business is going through a huge restructuring. This will create cost savings and an increase in EBITDA. $18-$20 is his 12 month target.

Took a sharp jump on the basis that they are looking at selling off their Canada Bread assets. Usually when a big event happens you get a big jump for about 3 days. Right now, this potential has been baked into the price. They may decide not to which would create a pull back. Not sure there is a lot of potential on a going forward basis.