Is Sysco Heading in the Right Direction?

February 04, 2013

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Sysco is normal, but the balance sheet is negative.

	Debt-To-Equity	Cash	Long-Term Debt
SYY	0.62	$548.42 Million	$3.02 Billion
NAFC	1.18	$1.20 Million	$388.88 Million
UNFI	0.15	$8.94 Million	$150.44 Million

T = Technicals on the Stock Chart Are Mixed

The competitors listed below are smaller than Sysco, but it’s interesting to note that United Natural Foods (NASDAQ:UNFI) has outperformed Sysco by a wide margin over the past three years. Both companies currently yield 3.50 percent. Nash Finch Co. (NASDAQ:NAFC) has underperformed both companies and offers no yield.

	1 Month	Year-To-Date	1 Year	3 Year
SYY	-2.04%	-0.57%	4.62%	27.25%
NAFC	-2.01%	-1.60%	-26.12%	-33.14%
UNFI	-0.65%	0.39%	13.96%	111.30%

At $31.22, Sysco is trading below its 50-day SMA, at its 100-day SMA, and above its 200-day SMA.

50-Day SMA	31.57
100-Day SMA	31.22
200-Day SMA	30.09

E = Earnings Had Been Unimpressive

In an environment where most companies have been improving earnings consistently since 2009, Sysco has seen decreasing earnings since 2010. A lot of this has to do with a weak industry, but as an investor, industry trends should always be strongly considered. The good news is that revenue has improved on an annual basis since 2009.

	2008	2009	2010	2011	2012
Revenue ($)in billions	37.52	36.85	37.24	39.32	42.38
Diluted EPS ($)	1.81	1.77	1.99	1.96	1.90

We already know what happened this quarter. Now let’s take a look at previous quarters.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	10.59	10.24	10.50	11.05	11.09
Diluted EPS ($)	0.51	0.43	0.44	0.52	0.49

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