This company's earnings and other basic indicators seem
"too good to be true". What am I missing? Is there any unusual
factor which is causing this stock to have such a low valuation?

SADIA S.A. (NYSE:SDA) Quote data by Reuters  
 
Last Trade: 35.41 
Trade Time: Dec 5 
Change:  0.81 (2.34%) 
Prev Close: 34.60 
Open: 35.00 
Bid: N/A 
Ask: N/A 
1y Target Est: 19.01 
 
  Day's Range: 35.00 - 35.41 
52wk Range: 9.25 - 37.20 
Volume: 2,100 
Avg Vol (3m): 4,727 
Market Cap: 805.83M 
P/E (ttm): 5.77 
EPS (ttm): 6.135 
Div & Yield: 1.70 (4.92%)

ATR --

Sadia S.A. is a Brazilian pork and poultry processor, so a substantial
part of its market risk is currency risk.  Indeed, Hoover's Online
shows a 23.7% decline in sales from 2001 to 2002, while sales in
Brazilian Reals have actually increased.
Hoovers Online
Sadia S.A.
http://www.hoovers.com/free/search/simple/xmillion/sadia/--ID__95097--/free-co-factsheet.xhtml

Nonetheless, Sadia may be a good buy -- and is rated a "strong buy" by
Santander Central Hispano Investment in its Oct. 30, 2003 report.  The
report is available for purchase for $12:
Multex/Investor
" Sadia 3Q Brief-Impressive 3Q03 Results, Beating Our Estimates on
Almost Every Line" (Oct. 30, 2003)
http://www.theinternetanalyst.com/download.asp?docid=31310283&target=%2Fstocks%2Fanalystresearch%2Fhome

The Santander Central report notes that gross margins are increasing;
that debt continues to decrease and is now near the 50% level (from
93% in 2000); and that exports continue to increase for the company.

However, an investor should be cautioned that Santander Central is
also a provider of financial services to the company:
Deutsche Bank
"DEUTSCHE BANK CLOSES $55M SYNDICATED INSURED RECEIVABLES PURCHASE
FACILITY FOR SADIA S.A." (June 18, 2003)
http://www.cib.db.com/gtf/stef/news/press_releases/2003_pressrelease_jun18.htm

Finally, it may be a good time to be optimistic about Brazilian
investments.  Fitch Ratings, a Chicago credit market ratings firm
similar to Standard & Poor's, upgraded Brazilian currency and
corporate outlooks from B to B+ on Nov. 6, 2003.  You'll need to
register at the Fitch site in order to read the press release, but the
upgrading included Sadia S.A. equity:
Fitch Research
Home Page
http://www.fitchratings.com/

Some suggested resources for examining Sadia in more detail:
1. Hoover's Online -- which shows the major 3 competitors (Campofrio
Alimentacion, Perdigao, and Tyson Foods).  This will give you a chance
for some direct comparisons.
2. Check to see if your library has access to Investext, which carries
analysts reports, including Santander Central Hispano Investment.
3. Examine the Sadia S.A. financials at the SEC website:
SEC
Edgar Database
http://www.sec.gov/cgi-bin/browse-edgar?company=Sadia&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany
4. You may also wish to study Brazilian inflation and foreign currency
trends, which form much of the risk.

And finally, the following Google strategies will turn up additional resources:
"Santander Central Hispano" + Sadia

Best regards,

Omnivorous-GA

Just the info I was looking for. Thanks.