Saturday, October 14, 2006

SAB - Grupo Casa Saba, S.A. de C.V.

Mexican distributor providing higher cash flow yield than 10-year U.S. treasury bonds.

Company Background: Grupo Casa Saba, S.A. de C.V. operates as a multichannel, multiproduct wholesale distributor in Mexico. It primarily offers pharmaceutical products, health, beauty aids and consumer goods, general merchandise, publications, and office and other products. The company distributes its products through pharmacies, mass merchandisers, retail and convenience stores, supermarkets, and other specialized channels. As of December 31, 2005, it operated a network of 22 distribution centers. Grupo Casa Saba also offers a range of value-added services, including multiple daily deliveries and emergency product replacement services, as well as provides services that include training, conferences, and trade fairs. The company was founded in 1892 and is based in Mexico City, Mexico.

Sales & Revenue Stablitity:

Company shows financial stability over the last 5 years with revenue
and income growth rates of 3% and 8%, respectively.

Stock Performance:

Stock price charts shows steady growth, some risk is involved due
to very low daily trading volumes.

2006 YTD (through 10.2.2006) 25.8%
2005 FY -2 .9%
2004 FY 48.1%
2003 FY 10.5%

Yield Summary: Free Cash Flow yields are averaging ~7% over the last 5 years, with the current US 10-year note at 4.79%. Company started to distribute a dividend in 2003, around the 2.5% yield.


Company website, Yahoo Finance


ETStockideas said...

Please feel free to comment on any personal research completed

David said...

I've owned this stock for a while. Seems to be an underfollowed, well run company. David Merkel

ETStockideas said...

I have owned this stock for a short 3 months now and it has provided a nice return. The only words of caution are the low trading volumes, not much concern for me since I am expecting to hold this for a few years. I am looking forward to buying more when the opportunity arises.