Sysco Corporation Should Not Have Five Stars on CAPS
As best I can tell, Sysco corporation has outperformed the S&P only two years in the last six (2006 and 2008), including this year so far, and is cumulatively massively underperforming both the S&P price index and the S&P total return index. Yet it continues to be a recommendation of many smart people, and in fact has a 5-star rating here on CAPS. Morningstar gives it a 4-star buy rating. And not only has it not outperformed in the past, my (NON-expert) analysis of it and of its history of cash flows and likelihood of future cash flows makes it seem extremely unlikely either that it is remotely undervalued even now, or that it can outperform the S&P price or total return index going forward. That seems true even though it is cheaper than it has been for years, as its P/E ratio has continued to contract in tandom with its slowing prospects. In Peter Lynch terms it is a "sluggish grower," not even a "stalwart." It is the epitome of a stock you buy only for the most conservative of reasons. This post is complete in its conclusions, but if you like, you can see here for my longer analysis and cash flow spreadsheet.