The Successful Investor Hotline – Friday, February 1, 2008

Article Excerpt

SAPUTO INC. $28.15, Toronto symbol SAP, has agreed to buy the operations of Wisconsin-based Alto Dairy Cooperative, which makes cheeses under a variety of brand names and private labels. The $160 million U.S. price is 22% more than the $131.0 million (Canadian) or $0.63 a share that Saputo earned in the six months ended September 30, 2007. The new operations should expand revenue at Saputo’s U.S. operations by 20%. The company has a strong history of successfully integrating new operations, which helps cut the risk of expanding through acquisitions. Saputo is a buy. ROYAL BANK OF CANADA $51.43, Toronto symbol RY, purchased hedges from a U.S.-based bond insurer to protect it from losses related to U.S. subprime mortgages. Due to growing uncertainty over the ability of this insurer to meet its obligations, Royal now plans to write down the value of these securities by $104 million. However, that’s equal to just 2% of the $5.5 billion or $4.19 a share that Royal…