Sysco: Why I Doubled My Holdings

On Monday I made my first equity purchase in my non-registered portfolio since February. I doubled my position in food service firm SYSCO (SYY) at $22.95/share.

For my thoughts on SYSCO click here.

About half of this purchase was made with dividends and distributions which I've received over the past few months.

Like all of my other holdings, SYSCO will be a long term piece of my portfolio. The stock currently yields more than 4%, and trades at a P/E ratio that is well below it's historical average. The company is having a flat 2009 due to the recession, however I expect the company to come out of this downturn with more market share, and to return to earnings growth that will warrant a P/E north of where it is today. The restaurant industry is under a dark cloud right now due to the downturn in consumer discretionary purchases. I believe in due time this area will pick up and SYSCO will benefit.

Comments

[hserb79:]

Did the fact that SYY's competitors are all privately held have something to do with your decision to buy? And if their competitors went public, would you still hold SYSCO, and why?

Aug 05 03:24 PM