Food distribution is all about the tradeoff between cost and quality -- too pricey and restaurants can't afford to stock their kitchens, too low-quality and restaurants lose with patrons. Sysco's size enables it to strike the balance very well with a more effective supply chain than smaller peers. From a food service standpoint, it makes sense to turn to a supplier like Sysco; after all, the firm can take many of the costs and food safety concerns off of a restaurateur's plate, helping profitability down the line as well.
While Sysco's growth-by-acquisition strategy has probably mostly run its course, there's still considerable room for organic growth as the pendulum keeps swinging toward higher consumer spending on dining out. Meanwhile, a hefty 3.5% dividend payout should keep eating away at shorts' ability to stay in this stock.
It's a little surprising that M&T Bank (MTB) is on our list of hated stocks. After all, this $13 billion regional banking name managed to come out of the Great Recession as one of the best-positioned banks in the country, and its performance continues to impress investors. In the last 12 months alone, shares have climbed close to 25%, easily besting the performance bought on by the broad market.But short sellers see that performance as overblown at this point -- and they've boosted M&T's short interest ratio up to 10.3 as a result. M&T Bank is one of the bigger regional banking names in the country, occupying a second tier in between the mammoth big-four banks and the hundreds of smaller regional names. Part of M&T's secret to success has been its unique business model: Believe it or not, this bank is actually a bank. That persistence in the retail banking space, coupled with strict underwriting policies, is a big part of why M&T was able to make it through the Great Recession without the struggles peers faced. In fact, this firm managed to grow its book considerably by buying smaller beleaguered banking names. Even though the low-interest-rate environment that's being promulgated by the Fed is creating a challenges for MTB, the bank has been making up for it by increasing volume in recent quarters, particularly in its commercial loan book. This bank's lack of missteps isn't a reason to bet that it's due for one and short shares -- it's a reason to be a buyer.
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