NYSE:SLE
$12.67
(2/9 3:16PM)
+1.8%
| Open | $12.5 |
Mkt Cap | $8.7 Billion |
| High | $12.8 |
52Wk High | $12.61 |
| Low | $12.48 |
52Wk Low | $6.80 |
| Volume | 6.0 Million |
Avg Vol 10D | 5.9 Million |
Ockham's Rating/Recommendation Summary
Rating specific information requires Premium Access.
Buy Now
or
Learn More about Ockham's Features and Services.
SLE Revenue
As a value investing shop, we are interested in seeing how SLE's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 0.95x and the low end of the range at 0.62x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for SLE of 0.66x is well below its normal historic Price to Sales levels. At a price of $12.50, SLE is 16% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
SLE Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of SLE, Ockham views their current Cash Earnings as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for SLE, the current level of Cash Earnings compared to its historical levels helps identify where SLE is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 14.54 and a historical low Cash Earnings per share ratio of 8.84, an investor can relate where value becomes optimal.
Now that SLE’s current price is $12.50 and its Price to Cash Earnings ratio is 9.47, we are very positive on its outlook from the cash earnings perspective. In fact, SLE is now trading a full 19% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why SLE has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.
SLE Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for SLE to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for SLE is $0.44 producing a current dividend yield of 3.52%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from SLE against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from SLE over previous years was 6.47% while the lowest dividend yield was 2.55%. With that range in mind, SLE’s current dividend yield is a full 21.95% below its median dividend yield historically. This is a negative from our perspective.
Bullish/Bearish: Sentiment and SLE Discussed on Zero Hedge
Zero Hedge talked about the sentiment surrounding SLE and the way they are perceived in the marketplace.
Sara Lee Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Due to deterioration in our valuation, we downgraded SLE as of Saturday, January 30, 2010. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs.
“… 77%), SARA LEE Corp. (-0. 93%), and XTO Energy Inc (-0. 68%) in the tighteners. In the more financial-heavy CDR NAIG LQD 50 index, sentiment is bearish with 48 wider to 2 ... …”
SLE's Back in the News After More than a Month on Fast Money
It's been at least a month since we noticed any major news coverage of SLE, so the story in Fast Money may get the ball rolling.
We have recently (Saturday, January 30, 2010) downgraded this stock due to deteriorating fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sara Lee Corporation has actually sunk a bit in comparison to the others. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Sara Lee Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals.
“… the three I named off, wheat is our SARA LEE bread in north america, and then coffee, we are, you know, one of the biggest coffee suppliers in the world. That affects us. > > …”
Heard on Fast Money: CEO of SLE Discussed
Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of SLE's CEO on Fast Money.
We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Sara Lee Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Due to deterioration in our valuation, we downgraded SLE as of Saturday, January 30, 2010.
“… SARA LEE in the midst of a company turn around, and nearing a 5 -week high has reported a blowout quarter today. Ceo brenda barnes, as the saying goes, nobody doesn't like SARA ... …”
First SLE News on Fast Money in More Than a Month
It's been at least a month since we noticed any major news coverage of SLE, so the story in Fast Money may get the ball rolling.
We have recently (Saturday, January 30, 2010) downgraded this stock due to deteriorating fundamentals. The Ockham valuation currently has a Fairly Valued stance on SLE because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sara Lee Corporation has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards SLE and think that it will generally perform in-line with the S&P 500.
“… SARA LEE rising when others aren't. But are the big moves baked in? The ceo reveals the company's recipe for future success exclusively on "fast. …”
SLE's Back in the News After More than a Month on Power Lunch
There has not been much to report from SLE in the last few weeks at least, but Power Lunch talked about the stock recently.
Sara Lee Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Due to deterioration in our valuation, we downgraded SLE as of Saturday, January 30, 2010. We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs.
“… comeback story. The boss of SARA LEE gives us the secret ingredient behind its success on america's post-market show tonight. …”
Power Lunch: Get Plugged into SLE News Regarding The CEO
CEO's are the strategic leaders of their companies, so any mention of them will garner special interest from us.
We have recently (Saturday, January 30, 2010) downgraded this stock due to deteriorating fundamentals. The Ockham valuation currently has a Fairly Valued stance on SLE because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sara Lee Corporation has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards SLE and think that it will generally perform in-line with the S&P 500.
“… Ceo of SARA LEE joins us discuss the seek krets of tcrets of the stock's success. > > > halftime, though, back after this. Stocks in the soverei. …”
SLE News Mentioned on Squawk On The Street Recently
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on SLE from Squawk On The Street.
We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs. Based on our methodology, Sara Lee Corporation should hold some appeal to value investors as we view it as Undervalued. While bearish sentiment on a stock is not always a bad thing, it is something you need to be aware of. The Motley Fool survey of crowd sentiment shows that many investors believe this stock will underperform.
“… Business remains weak, but procter & gamble, they're buying SARA LEE's omnipure. They're getting an air care and toilet care products brand. …”
The Outlook for Emerging Markets and Sara Lee Corporation Discussed on Squawk On The Street
For growth, there is nowhere growing more rapidly than emerging markets. Recently, Squawk On The Street talked about emerging markets and their impact on Sara Lee Corporation.
Based on our methodology, Sara Lee Corporation should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… More than $550 billion of the $700 billion allotted for the procter & gamble has a deal to buy SARA LEE's air freshener unit for $700 million. …”
RazorWire has Detected News About SLE on The Opening Bell on Fox Business
The latest news on The Opening Bell on Fox Business in regards to SLE came through on RazorWire recently.
Based on our methodology, Sara Lee Corporation should hold some appeal to value investors as we view it as Undervalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; SLE has received less coverage from the financial media in business television and blogs.
“… Also, you have procter & gamble close to buy SARA LEE's fresh business, freshener, this is an air freshener business and 7 high school million dollars roughly so this 700 million ... …”
News Developing on Squawk On The Street for SLE
As always, the latest news on SLE is available to Ockham clients through RazorWire, and it was mentioned recently on Squawk On The Street.
At present, Ockham has a valuation stance of Undervalued on SLE, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Sara Lee Corporation underperforming. In comparison to the other stocks that we follow, Sara Lee Corporation has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.
“… And here's SARA LEE for your pifr some saying the budget conscious consumers will help them. When you're done with it all, take an antacid. That stock is up strongly today. …”