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No. of Recommendations: 2
I realize that I recently stated that I considered SJM too pricey, but after running
through the SJM presentation from 04 Sep 2002 and calculating some forward looking 
numbers (below), I have reconsidered.  I take fault at the timing of my previous comment 
as I realize that I should have looked a little more into Fiscal 2003 numbers as 
opposed to just using the present numbers and a vague idea of the leap in growth expected
from the merger/acquisition of Crisco/JIF.
From the SJM Prudential Securities "Back-To-School" Consumer Conference Presentation given
4 Sep 2002 ( ):
            Est 2003*    2002*    Change
Sales       $1.3B        $687M    +89%
Net Income  $88-93M      $34M     +159% to 174%
EPS         $1.84-1.94   $1.45    +27%  to 34%

Shares Outstanding = 49.5M
And estimates for Fiscal 2003 FCF*:
Net Income                 = $90M
Depreciation/Amortization  + $45M
Capital Expenditures       - $55M
FCF                        = $80M

*Excludes merger related charges.
Therefore using the closing market cap from 04 Sep 2002:
MC = $1.827B
Forward P/FCF = ~22.8
Forward P/E   =  19.6 - 20.8
and for comparison
From from 31 Jul 2002 (last available):
S&P500: Price/FCF = 25.160, P/E = 33.35
S&P400: Price/FCF = 19.580, P/E = 31.15

For more recent data on the S&P500, according to this article:
the S&P500 Price to FCF per share is about 20.7
Overall, I think that the projected numbers are obtainable for fiscal 2003 and I also
admire the commitment to continue paying out a good dividend.  SJM is not 
undervalued to any significant degree.  Rather it seems to me that it is closer
to being correctly valued for growth from JIF/Crisco.   Never the less, I believe that the 
future is bright for SJM with its expanded line up and that the company, with this 
large merger behind it, will once again settle down to a nice boring company.

Therefore, the reconstituted Boring Port will make its first purchase of 
25 shares of SJM at a price of $36.81 per share and a commission of $15.95.
The purchase will be reflected in the portfolio update at the end of 3Q, 2002.
Comments and (cringe) Criticisms of this Transaction are welcome.
Also, I would like to know if anyone has any other ideas.  With vacation
coming up next week (YES!), my filtration study will probably not get done to 
the end of the month, thus pushing back other research opportunities.
I would also still like to revisit MKC as well.
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No. of Recommendations: 7


I still think that SJM is too pricey. That wee asterisk pointing to "Excludes merger related expenses" is a worry. I think 20 x earnings is too expensive for a company that only expects to grow organically by 4% per annum, and as I have said before I want a bigger margin of safety for the uncertainty related to the merger.

Having got that off my chest, I promise to not criticise your purchase of SJM again. You obviously greatly admire the company and as the person who has stepped forward to run the port you have every right to buy the companies you want to. Thank you for getting this going.

An idea: FOTH the other day ( ) highlighted WP Stewart, a company that manages money for clients with > $1 million net worth, and also some mutual funds for the rest of us. They have a 25 year history of beating the S&P500. They pay a good dividend and have the potential to grow without significant capital expenditure - a feature I really like. I plan to look further and I'll report back here.

Once again, congratulations yofluke on the rebirth of the Boring Port.

Hamish Rose
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No. of Recommendations: 0
I wonder why pay such a high commission, especially when buying only 25 shares. How about ScotTrade or something else cheaper?


I am pleased to start with SJM. I find myself checking out the peanut butter and jelly section each time I go to the store. I can see some marketing changes already. I hope they don't put too much Crisco in the peanut butter.
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Marion wrote:
I wonder why pay such a high commission, especially when buying only 25 shares. How about ScotTrade or something else cheaper?

Mostly I chose sharebuilder because I currently use them for the once per month $4 per trade option. It actually occurred to me recently that I could (should) use the $4 dollar option in the future as well. At this point, I don't think following the sharebuilder rules to get the $4 trade (trade on Tuesdays) would hurt what the board is trying to do. Something to think about.

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