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Yaron Ron Reuven  

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  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    I agree with Paulo, and was hoping that I would deliver that message in the thesis. In addition to getting OPM for free by buying STKL, the rest of STKL is worth far more than current price with or without OPM. OPM and Mascoma are just a $4 - $6 bonus shareholders get by getting STKL.
    Dec 29, 2012. 10:15 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    Valuable Insights,

    thanks for reading. there's no 100% assurance that a certain multiple is right or wrong, the 12x EBITDA and 1x P/S are just what I believe to be fair numbers based on my 14+ yr wall street experience in running money as well as by looking at comps. here is the list of comp in the industry http://bit.ly/12X8IQ0

    As you will see from the comps I listed in the article (and link here), the average P/S multiple for the industry is 1.77x Sales, whereas the STKL currently is less than a third of that. a 1x PS would still be lower than the industry by nearly 50%, but double what it is currently.

    as far as growth for OPM is concerned, the 49% I mentioned was predominately through the acquisitions which I listed in the article. as mentioned, we believe those acquisitions were very smart and will turn out to be game changers for the company. ultimately, OPM is only a tiny part of the entire STKL story, so the reason we spent some time on it was to show that it is worth quite a bit more than the market and STKL has accounted for it on its books. But this just adds to STKL value which we believe is much higher with or without OPM (and Mascoma)

    the 10% organic growth rate I mentioned is what the company itself projects, which is inline with the 5-10% organic growth projected by HAIN and others in the industry, so we dont view it as aggessive. The additional growth we added on top of that is the growth due to acquisitions, which is also inline with the company's (and HAIN) past success.

    in regards to factoring growth into the valuation, the most important part that I hoped to show from the article is that even "without" the growth, the company is currently worth much more than the current price. If growth is achieved, than it should fetch much higher valuations than even the ones i mentioned. IMOS is a completely different company and sector so I dont see how the comparisons would make sense to eachother, but I am sure there are other articles discussing IMOS vs. its sector.
    Dec 29, 2012. 10:12 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    thanks Dominic,

    I've spent the last 14 years of my career searching out similar opportunities in the market, and it's never easy. the opportunities that are the most obvious are usually the ones we missed. IMO, SunOpta is the obvious choice that we havent missed.
    Dec 27, 2012. 03:01 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    trickdog,

    As I mentioned in the article, my debate is not to change anyone's diet or whether organic food is better than traditional, but rather to simply provide the facts about the company at hand, SunOpta, and the world that they're in. The Non GMO vote is not something I created, its something thats going on with or without my thesis on STKL. the fact that MON is the biggest NO vote contributor is a fact, not something I created, but rather something I found interesting. Not sure why you're offended by me mentioning it, as my mention will not have any affect on their $51BB market valuation or their business. you should not be ashamed to own MON, or any publicly traded business for that matter. its your money to do what you please with. not sure why you're calling my research a shameful pumping, or that you're not surprised by that, but I guess I'll just leave that mystery up for translation. The facts are listed in the article with my translation of them in order to arrive at a valuation. If they dont please you, you can just ignore and move to another article. good luck.
    Dec 27, 2012. 02:57 PM | 1 Like Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    bluedaug,

    yes $17mm writedown was in fruit business was exaggerated by market, and along with market collapse, destroyed huge market value for company. This has all been corrected and is far behind the company. The fact that the market has not rewarded them for recent long term and recent success is why we believe this is an opportunity. Investors' feelings can change from day to day, but the business's steady success is indisputable.
    Dec 27, 2012. 12:33 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    thekhoos,

    cashflow has improved drastically over past year, where first 9 months generated +$38mm versus -2.7mm last year. This should increase in line with rest of numbers over next year.
    Dec 27, 2012. 12:16 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    southgent1951,

    thanks. As you can see we believe STKL is much more than a powerball, as the business and assets we're valuing are already there even if you exclude the projected growth. Of course the growth we're projecting should be exceptional, but even if you exclude them from the valuation, you would still come our ahead by a mile at the current price.
    Dec 27, 2012. 12:13 PM | 1 Like Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    PSalerno,

    thank you. I think you misunderstood the section about the Non GMO ingredients. The whole purpose of STKL (as well as other organic food companies), is that the ingredients are "not" secret. its the traditional food that has GMO, (i.e. secret ingredients).

    the change from cellulosic ethanol technology as majority of business to organic food as current majority of business was surely not the plan coming out of the gate in 1973, but already happened 13 years ago and should not make their success irrelevant. The business makes over a billion dollars a year, and should be valued accordingly.
    Dec 27, 2012. 12:09 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    Hello Paulo and thanks for reading. like all valuation methods, 12x EBITDA on the Opta Mineral Group is just one format of what we believe is justified based on a 30%/yr growth rate (they grew sales 49% this year) . We have also used a P/S valuation method, and even a 1x p/s multiple of current sales ($138mm) would arrive at a value that's over 3x the current value STKL has on the books for them. although different industries have different valuation methods, a 1x p/s multiple is considered extraordinarily cheap in most industries. Further, if they achieve the $250mm goal in next 1-2 years, then a 1x P/S would again amount to a much higher valuation again. Most importantly the OPM is just a small part of overall valuation of STKL. As i noted above, we believe a buyer of the organic food business could pay north of $29 per share. Since you only mentioned the OPM valuation, I assume you dont disagree with the valuation methods I put on the other 2 businesses. So, Even if all of our estimates are wildly optimistic and should all be cut in half, the total value of all divisions should be between 16.50 to 18.50 per share, which is considerably higher than current 5.58 price. do you agree?
    Dec 27, 2012. 12:02 PM | Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    Thanks Ashraf
    Dec 26, 2012. 09:57 AM | Likes Like |Link to Comment
  • ARM Holdings: Future Growth Drivers Abound [View article]
    Rob,

    Again, you resort to your tough guy behind a computer attitude. Lets try this again, my argument was mainly focused on the valuation, not technology. if you read it without a bias, it would become apparent. The point of my comment was not really because I care about your opinion, but rather to know your opinion and actually have a educated debate. That actually helps bring viewers to your article, which is usually the point of writing an article for most people. But since you dont like any opinion that could throw a wrench into your analysis, you dont have to respond to me and just go back to your sandbox and play by yourself.

    PS. you need to grow up buddy
    Dec 24, 2012. 02:16 PM | 3 Likes Like |Link to Comment
  • ARM Holdings: Future Growth Drivers Abound [View article]
    Rob,

    I'm not sure why you find it neccessary to insult me instead of addressing the legitimate issues I brought up. They were based on your own numbers and arguement s. I know this is your first article, but the commentary section is for readers to question or add support to the arguement made in the article. Although your distaste for my opinion is clear, you should take the example I (and many other contributors on SA like Ashraf) of my article's commentary section into account. Even though your (and a few others) comments were continuously insulting, I still addressed them with a legitimate opinion like a grown up. If you don't care for conflicting opinions, and are just trying to pump a stock you like (or dislike)you should start a blog that doesn't allow comments. That way you are free to play in your own sandbox with no one to interfere with your toys.
    Dec 24, 2012. 01:55 PM | 4 Likes Like |Link to Comment
  • ARM Holdings: Future Growth Drivers Abound [View article]
    There are two problems with this (and all other) armh bull arguments. First it relies too much on the future. As your article stated, armh has a 1.2 PEG based on 2014 earnings. That's two years from now and assumes today's tech and the markets valuation acceptance will be the same in two years from now. With all due respect, both are a naive assumption in my view. Second is that all valuation and future projection only justify "today" price, which means that at best the stock will be dead money since too much of the uncertain future is priced into today's price.
    Dec 23, 2012. 12:44 AM | 3 Likes Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    thanks Alan. since the OPM group is working off of its own financials, the additional investment is not disturbing the main organic food business. the financials are consolidated for reporting purposes, but not for operations. Even the debt is separated, as noted above. our discussions with management gave us some insight as to the ongoing strategic review (divestment of OPM), and we actually hoped that they would decide not to sell it, since it is very profitable and STKL doesn't have to do anything to reap the gains. in so many words, they saw that they were not getting as favorable terms for selling OPM at the time as they would be able to get had they bulked up the company a bit more. This was an easy decision since the investment and hard work is being done by OPM, and all STKL has to do is just not sell the stake. they will sell the stake within the next couple of years or less, depending on price. unlike Purity, the OPM division is making money while we wait.
    Dec 22, 2012. 06:51 PM | 1 Like Like |Link to Comment
  • SunOpta: Cheap Organic Food Company With 2 Secret Ingredients [View article]
    thanks Don, I appreciate it. CEO Steve Bromley is absolutely terrific, and he has a great team to help him. It's hard to find great management these days, and I have known and seen Steve and his team work through some tough environments over the last 7-8 years, and always come out on top. That by itself has been a big part of the reason we've been a long term investor in the company.
    Dec 21, 2012. 01:55 PM | Likes Like |Link to Comment
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