Bookham, Inc. (Public, NASDAQ:BKHM) is now trading at $1.45 and Sara Lee Corp. (NYSE:SLE) shares are only $13.33 a piece. Long story short, Sara Lee is a great play during this recession feared market and Bookham is worth a few bucks to take a chance on.
Sara Lee Corp. (NYSE:SLE) is being thrown under the bus and Wall Street has got it all wrong. Yes last quarter for them was not the best, missing estimates by two cents a share but they are on target for 2008 earnings of $0.82 to $0.88 a share.
Q2 sales growth continued a trend, advancing 9.7%, a modest improvement from 8.3% growth during the first quarter. Adjusted sales grew a less impressive 4.2%. "Adjusted" numbers for Sara Lee exclude the effects of acquisitions, divestitures, and foreign currency.
But Sara Lee's existing brands, like the namesake bakery products, Hillshire Farms, and Jimmy Dean are money in the bank and price hikes are on the way.
On Feb 6th the CEO Brenda Barnes said "it's pretty likely," that price increases on their products are coming during an interview with Reuters. Sara Lee has already increased prices on many of its products in the wake of unprecedentedly sharp increases in commodity costs, and if they go up more America and everyone else (International Markets) will have to pay the price -- and they will.
SLE pays a 11 cent dividend every quarter, and their Financials are beautiful:
Financials
(In millions of USD)
| Income Statement |
Quarterly
(Dec '07) |
Annual
(2007) |
Annual
(2006) |
| Total Revenue |
3,491.00 |
12,278.00 |
11,460.00 |
| Gross Profit |
1,326.00 |
4,736.00 |
4,440.00 |
| Operating Income |
204.00 |
419.00 |
192.00 |
| Net Income |
182.00 |
504.00 |
555.00 |
| Balance Sheet |
|
|
|
| Total Current Assets |
5,112.00 |
5,643.00 |
6,857.00 |
| Total Assets |
12,079.00 |
12,190.00 |
14,660.00 |
| Total Current Liabilities |
3,802.00 |
4,301.00 |
6,361.00 |
| Total Liabilities |
8,997.00 |
9,575.00 |
12,211.00 |
| Total Equity |
3,082.00 |
2,615.00 |
2,449.00 |
| Cash Flow |
|
|
|
| Net Income/Starting Line |
182.00 |
504.00 |
555.00 |
| Cash from Operating |
267.00 |
506.00 |
1,288.00 |
| Cash from Investing |
-99.00 |
568.00 |
365.00 |
| Cash from Financing |
-330.00 |
-913.00 |
-41.00 |
| Net Change in Cash |
-129.00 |
289.00 |
1,698.00 |
Last week Sara Lee Corp. (NYSE:SLE) said its strong international beverage and bakery sales helped the food maker post a $182 million second-quarter profit. They predicted 2008 revenue of $13.4 billion, while analysts said they expect revenue of $13.22 billion. Yet the shares have done nothing but fall:
The more this stock falls, the more I will buy, the end.
Bookham, Inc. (Public, NASDAQ:BKHM) reported a second quarter net loss last month of $5.18 million or $0.06 per share, narrower than $10.95 million or $0.13 per share in the prior year quarter.
Non-GAAP loss was $1.11 million or $0.01 per share for the current quarter, narrower than $8.01 million or $0.07 per share a year-ago.
On average, seven analysts polled by First Call/Thomson Financial expected the company to report a loss of $0.06 per share.
Quarterly revenues increased to $58.95 million from $54.28 million last year. Five Wall Street analysts expected revenues of $57.05 million.
Looking forward, for the third quarter, the company said it expects revenues in the range of $56 - $60 million. Six Street analysts expect revenues of $57.83 million.
Not that impressive but for a stock that now trades under the price of a bottle of Coke, I'll play the odds for a few bucks.
Bookham, Inc. designs, manufactures and markets optical components, modules and subsystems and sells them to telecommunications systems vendors, as well as to customers in the data communications, military, aerospace, industrial and manufacturing industries.
Their customer base is not going to help in the short run to increase revenue that will help boost the stock price. But a few months from now and later in the year when the market starts to recover, so will BKHM shares.
Happy Trading fellow Masters, there are two stocks I want you to watch in the coming weeks: SLE & BKHM
Article by Frank Lara Jr. Contributor at TheStockMasters.com and to the Master Picks Newsletter
Disclaimer: The Author does hold a long position in SLE and does not have a position in BKHM.
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