STKL

[eliteG]

STKL(nasdaq) - SunOpta Inc..

Mkt Cap:           566.71M
Float:                  49.40M

Profile:  SunOpta is a rapidly growing, vertically integrated company with extensive expertise in sourcing, processing, packaging and distributing natural, organic and specialty foods. The Company has three high-growth ethical business segments focused on a healthy products portfolio that promotes environmental responsibility and the health and well-being of its communities.

The largest operating group, the SunOpta Food Group, represents over 90% of annual revenues and is focused on the fast growing natural, organic and specialty foods markets.  Opta Minerals Inc. (TSX: OPM – 70.6% owned by SunOpta) represents approximately 9% of annual revenues and is focused on processing and recycling abrasive and industrial minerals.  The SunOpta BioProcess Group represents approximately 1% of revenue and is focused on the processing of biomass for the production of cellulosic ethanol and other bio-products.

website: http://www.sunopta.com/


The Quick - STKL has a connection to ethanol, superb fundamentals and chart shows a sustained volume pickup and breakout out of an ascending channel.  Earnings coming up and we must have a position before this runs away.  


Fundamentals

This company has an excellent website full of information.  Make sure you visit!  Here are some very helpful .pdf documents the company has provided to illustrate their amazing fundamentals.

Links:
http://www.sunopta.com/Assets/STKLQ405Final.pdf
http://www.sunopta.com/Assets/pdf/2005_AR.pdf

This company has grown steadily!  Increasing revenues.. and increasing shareholder value on a consistent basis!




Technicals

Long-term

On the long-term chart we see recent heavy sustained volume..  a huge signal that STKL is about to get very dynamic and defy gravity.  The buildup is occurring just underneath the all-time high.  Its time to breakout!


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Short-term

On the short term-chart the heavy volume has translated into an ascending channel breakout.. which may test the top of the channel trendline soon... giving us a great entry!    Clear support in place from the channel, 9ema, 20ema, magenta trendline.


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Trade Plan

STKL has Q1 earnings on Tuesday, May 2nd 2006 after the close of the market.  No one can say how earnings will go but as of right now we are planning to hold over earnings.  STKL has an impressive track record of consistent growth.. and has a powerful chart indicating to us that big money is trying to take a position before the release.  Holding over earnings is very risky...  be aware.

Support is in place below in case our timing is incorrect.  We will set an exit plan after we have our position.  We must have this planned because no matter how great a trade looks to you.. it is the market that is boss!

Entry:  Our entry will have 2 parts.  We will try to buy @ limit 9.65 in the morning.  If this does not execute we will buy at the market after 12pm.  The main idea.. we want to have a position.

We will buy STKL according to plan on 4/27

-G

[cache00]

Hey G, looks like your order got filled, I think that's close to today's bottom, nice trade!

[snowcat]

It is important to realize that this is a very diversified company.  Their organic food products are supermarket staples as well as seen in specialty stores, like Trader Joes.

However,  this is being pumped as an Ethanol play all over, even though it is a tiny part of their operation and will likely react to the drop in oil prices.

I would wait until oil settles down for a while.  It is at the top of the chart right now at over $75.  All the ethanol stocks have looked great over the past few months and this went along for the ride.  It is a boring, profitable food company, but it looks like it went for the ride with the ethanol stocks.  (which may continue! )

Earnings can always be hit or miss - even stocks with good earning sometimes get pummeled.

Just my snowy opinion,...................

Also look at MPGI and CRESY, two food companies in similar situations (and of course ADM)

[cache00]

G, good call! I'm already $$++.

Thanks!

[Loffigus]

Me too -- and with today's action (all red in my portfolio) -- It's nice to have one that is moving up!   

[learnstock]

Hi eliteG,

    Today I missed STKL again because the update letter was later than usual(same as CHID).
    It would be great if you could send the daily letter as early as possible so we can
    get it before going to work.

  Thanks!

[eliteG]

G, good call! I'm already $$++.

Thanks!

Thx cache    Lets make some Mo!

Hi eliteG,

Today I missed STKL again because the update letter was later than usual(same as CHID).
It would be great if you could send the daily letter as early as possible so we can
get it before going to work.

Thanks!

Hey learnstock - we always try to send as early as possible but for us the key is to get our members this information before mkt open.  Generally we are done with analysis quite early so those update letters are the exception(even though they still came before mkt open).


update STKL:

Allright!  We got to pick up this hot stock 3 cents from the low of day!  STKL finished in a nice hammer doji type candle(dragonfly).. this indicates strong support especially if confirmed the next day by a close above todays high.  Hammer doji's can lead to some strong moves.

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Position: bought STKL @ 9.65 on 4/27/2006
Order: Hold
Exit: stop @ 8.75
Target: n/a
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[fill_the_gap]

Motley Fool
Oat Fiber ... and Ethanol?
By Stephen D. Simpson, CFA


I pride myself on finding strange stories or weird situations in the investing world. I've owned a company that baked dirt, a company that contracted with witch doctors to develop new drugs, and a company whose primary attraction was huge acreage in Argentina.

Yet I still manage to find SunOpta (Nasdaq: STKL - News) strange.

SunOpta is a Canadian company that combines a fast-growing -- yet still low-margin -- food business with a big ownership stake in an industrial abrasives company, plus technology that could be highly relevant to the emerging ethanol market. See, I told you this was weird.

Fourth-quarter results were pretty good -- reported revenue grew 48%, earnings per share tripled (though from $0.01 to $0.03), and all units of the business delivered growth. Though a lot of the revenue growth came from acquisitions, and internal growth was about 18%, operating margins did improve a bit.

But food isn't really the sizzle here. Sure, there are definitely solid prospects for the company's oat fiber, soy products, and fruit businesses, and SunOpta counts companies like Hain Celestial (Nasdaq: HAIN - News) and Unilever (NYSE: UL - News) amongst its customers.

But what's likely to really fire the imagination is the company's steam explosion technology -- in particular, its potential application to the ethanol industry. See, present-day ethanol production isn't quite as efficient as it could be (or needs to be). Most of a corn or wheat plant's biomass is cellulose, and that really can't be used with current technologies.

Because of this, many companies are scrambling to develop chemical, mechanical, or biochemical methods that would allow this material to be made into ethanol. In the case of SunOpta, it is supplying its technology and equipment (which uses high heat and pressure to break down the cellulose into something more useful) to a cellulosic ethanol plant under construction in Spain, as well as a pilot technology facility in Nebraska.

So you can see the appeal -- a little company (only about $400 million in market cap) that could perhaps supply key technology to big ethanol players (or potential players) like ADM (NYSE: ADM - News), Ag Processing, and/or Royal Dutch Shell (NYSE: RDS-B - News), to say nothing of the dozens of ethanol partnerships and cooperatives springing up around the country.

It's a big gamble, though. Sure, the company has a profitable and growing food business, but if the momentum crowd really gets a hold of this story, who knows what will happen. I find it a little strange that the company lists no R&D spending on its income statement, but if this company's cellulosic ethanol technology is the real deal, that could really put gas in this tank.

Unilever is a Motley Fool Income Investor recommendation..

Fool contributor Stephen Simpson has no financial interest in any stocks

[la-onda]

fyi:
STKL: Short Interest UP 2.4% to 4.8M in Apr 2006
Tuesday , April 25, 2006 16:26 ET

According to new short interest data from NASDAQ, short interest for SunOpta, Inc (NasdaqNM: STKL) INCREASED 2.4% to 4,811,197 shares for the month ended mid-April, 2006.

SYMBOL         MARCH           APRIL          CHANGE       %CHANGE    DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
STKL           4,699,309       4,811,197        +111,888        +2.38%           5

Based on STKL's 20-day average daily share volume of 1,143,190, it would require approximately 5 day(s) of buying to cover this short interest.

[eliteG]

update STKL:

STKL looked very nice early on but retreated and finished down to end the day.  We are still above our buy point and outside of the channel.  Earnings are out pre-market on Wednesday and we have decided to hold over earnings.

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Position: bought STKL @ 9.65 on 4/27/2006
Order: Hold
Exit: stop @ 8.75
Target: n/a
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[calguy]

Not sure if I feel comfortable holding this over earnings. My thinking is that the stock has had such a run up from the ethonol rally, it is going to have to post killer numbers in order to continue the uptrend.
Yesterday's strong pop and huge PLOP makes me wonder how much of this recent run was based on momo from the ethonol, which is a small part of their business at this point. If it rins early on today as it did yesterday I'll be tempted to sell at least half my position in order to cut my risk. I kicked myself all day yesterday for not selling into that early morning pop.
Any thoughts??

[fill_the_gap]

Not sure if I feel comfortable holding this over earnings. My thinking is that the stock has had such a run up from the ethonol rally, it is going to have to post killer numbers in order to continue the uptrend.
Yesterday's strong pop and huge PLOP makes me wonder how much of this recent run was based on momo from the ethonol, which is a small part of their business at this point. If it rins early on today as it did yesterday I'll be tempted to sell at least half my position in order to cut my risk. I kicked myself all day yesterday for not selling into that early morning pop.
Any thoughts??

Calguy,

I agree with your post.  My style may also differ from other people.  I never hold into earnings as have been burned too many times.  Just a rule that I follow.  Much of this move is based on Ethanol and the earnings will not be based on that.  It may very well continue.  I will sell today at some point and evaluate again after earnings. 

[eliteG]

Holding over earnings is always risky but I feel in this instance that the TA looks very strong.  The volume and the price rise were steady and controlled.  Only a small percentage of the company deals with ethanol.. that is very clear on their website.  I think that we are playing the constant earnings rise on STKL and the strong and steady volume and price rise.  I like this indecision before earnings.. instead of crazy buying or selling. 

[calguy]

Sold my entire position at the open at 10.07. Still kickiung myself for not doing it yesterday around 10.50, but that's the way it goes. Still made a small profit. 

[eliteG]

Sold my entire position at the open at 10.07. Still kickiung myself for not doing it yesterday around 10.50, but that's the way it goes. Still made a small profit. 

So nice trade?  Did you make a profit?