Add Cerebos Pacific to holdings

I have added cerebos pacific to my stock holdings. I will be providing info on cerebos as best as i can.

• Stable company with a strong set of products, backed by its flagship product Brands chicken essence

• Strong past earnings and sales. Operating profit has been positive for past 15 years. only 1 year out of those 15 years has it gone into net profit loss.

• PE 13.5 times

• Market to book ratio 2.28 times

• latest div yield 9.06%

• latest payout 122% of net profit

• free cashflow yield 8.75%

• free cashflow /Enterprise value 7.71%

• Cash dividend coverage 1.18 times

• Net profit margin 9.26%

• ROE 16.92%

• Cash coverage 12.63 times

Past div record(cents)

1993 – 8.4
1994 – 10.4
1995 – 12.6
1996 – 14.7
1997 – 16.3
1998 – 13
1999 – 8
2000 – 8
2001 – 10
2002 – 18.46
2003 – 12.9
2004 – 16
2005 – 25
2006 – 26.88

Note:

1. latest payout looks irresponsible at 122%.however, on examination of operating cashflow -capital expenditure shows that the fcf yield is close to the div yield. I believe fcf is a better gauge of whether cerebos can payout such div in the future.
2. investors should be expecting yield to decrease. latest sales is at an all time high. Management is finding the operating environment increasing challenging to grow more sales. Still, its consistent payout makes cerebos attractive. a long term yield of 5.5% at 16cents div looks a more realistic target.