Oaktree Capital Management purchased 11,333,333 shares of SunOpta (STKL, Financial) on Oct. 7, according to a Schedule 13G filing with the Securities and Exchange Commission. The trade had a 2.82% impact on Oaktree Capital Management’s portfolio.
SunOpta has a market cap of $554.77 million, an enterprise value of $1.11 billion, a price-book (P/B) ratio of 1.42, a price-sales (P/S) ratio of 0.41 and a current ratio of 1.44.
SunOpta was organized under the laws of Canada in 1973. The company is a leading global operating business focused on healthy products that promote sustainable well-being. The company is focused on organic, non-genetically modified (non-GMO) and specialty foods. SunOpta specializes in the sourcing, processing and packaging of organic and non-GMO food products.
The company’s product portfolio consists of non-GMO raw materials and ingredients that are sourced primarily by vertically integrated global ingredients capabilities, and consists of three main commercial platforms: healthy beverages, healthy fruit and heathy snacks.
According to GuruFocus, SunOpta has a 4 of 10 financial strength rating with a cash to debt ratio of 0.01, an equity to asset ratio of 0.33, a Piotroski F-Score of 2 and an Altman Z-Score of 1.65. Its Beneish M-Score of -1.93 suggests the company manipulates its financial statements. The company also has a 5 of 10 profitability and growth rating with an operating margin of -0.66%, a net-margin of -3.65, a ROE of -11.12% and an ROA of -4.40%.
Below is a Peter Lynch chart that shows that SunOptra is currently trading below its intrinsic value.
Howard Marks (Trades, Portfolio) co-founded Oaktree in 1995. Oaktree is a value investor that looks to invest for the long term. It is likely that Oaktree sees value in SunOpta, despite the company not having the strongest financial statements, because consumers are now more conscientious about their health, and the healthy foods industry is growing. SunOpta also claims to be the leading North American provider of non-dairy organic aseptic beverages, which gives SunOpta a differentiation advantage against future competition within its industry. The health industry as a whole is likely to continue to grow exponentially in the years to come.
One of my favorite quotes is taken from Marks' book, “The Most Important Thing,” when he talks about risk.
“None of us can know the future with certainty, risk is inescapable. Thus, dealing with risk is an essential — I think the essential — element in investing.”
Disclosure: Author does not own any shares of this company.
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