The Kraft Heinz Company
Re: The Kraft Heinz Company
e
Packaged food stocks slip after General Mills hits an inflation headwind
Dec. 21, 2021 11:47 AM ETHormel Foods Corporation (HRL), SJM, K, GISMKC, BTTR, CPB, SOVOBy: Clark Schultz, SA News Editor
A tough read on the impact of cost inflation from General Mills (GIS -4.2%) today with its earnings report is weighing on packaged food peers.
Decliners on an up day for the broad market include Kellogg (K -2.3%), J.M. Smucker (SJM -2.3%), Hormel Foods (HRL -2.0%), Sovos Brands (SOVO -4.4%), McCormick & Company (MKC -1.2%), Campbell Soup (CPB -1.5%) and Better Choice Company (OTCQX:BTTR -5.6%).
General Mills pointed to an unprecedented combination of input cost inflation and supply chain disruptions during its FQ2. The company's higher pricing during the quarter was not enough to hit the consensus EPS mark. Jefferies says the warning from GIS execs on margin headwinds for the upcoming quarters is also a factor in the selling pressure today.
bron: seeking alpha
Packaged food stocks slip after General Mills hits an inflation headwind
Dec. 21, 2021 11:47 AM ETHormel Foods Corporation (HRL), SJM, K, GISMKC, BTTR, CPB, SOVOBy: Clark Schultz, SA News Editor
A tough read on the impact of cost inflation from General Mills (GIS -4.2%) today with its earnings report is weighing on packaged food peers.
Decliners on an up day for the broad market include Kellogg (K -2.3%), J.M. Smucker (SJM -2.3%), Hormel Foods (HRL -2.0%), Sovos Brands (SOVO -4.4%), McCormick & Company (MKC -1.2%), Campbell Soup (CPB -1.5%) and Better Choice Company (OTCQX:BTTR -5.6%).
General Mills pointed to an unprecedented combination of input cost inflation and supply chain disruptions during its FQ2. The company's higher pricing during the quarter was not enough to hit the consensus EPS mark. Jefferies says the warning from GIS execs on margin headwinds for the upcoming quarters is also a factor in the selling pressure today.
bron: seeking alpha
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
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Re: The Kraft Heinz Company
Ik denk dat we met kraft wel efkes stabiel blijven rond de 35. (=overname prijs van de aandelen).
Re: The Kraft Heinz Company
Daar zitten we nog steeds, hoewel begin december tweemaal de 33 USD uitgetest werden.
Bij Kellogg spelen er nu "Amerikaanse toestanden":
Der Lebensmittelkonzern Kellogg's wird in einer Sammelklage auf mehrere Millionen US-Dollar verklagt. Grund dafĂĽr ist der angeblich zu niedrige Erdbeergehalt in den Pop-Tarts
Sammelklage gegen Kellogg's
Die US-Amerikanerin Anita Harris aus Illinois reichte im August 2021 eine Sammelklage gegen den Lebensmittelkonzern Kellogg's ein. Grund dafür sind Pop-Tarts in der Erdbeer-Variante, wie CNN erklärt. Diese sollen laut den Klägern nämlich irreführend vermarktet werden. Auch die New Yorkerin Elizabeth Russett schloss sich der Sammelklage an und übernahm die Führung im Kampf gegen das Unternehmen, wie TMZ berichtet. Hauptpunkt ihrer Klage ist, dass das Produkt "Kellogg's Whole Grain Frosted Strawberry Toaster Pastries" zum Großteil aus anderen Früchten als Erdbeeren besteht.
Dem Konzern wird vorgeworfen, seine Kunden zu täuschen
Wie CNN weiter berichtet, geht aus der Sammelklage hervor, dass dem Konzern vorgeworfen wird, das Marketing für sein Produkt sei irreführend. Angeblich werde der Eindruck erweckt, dass die Fruchtfüllung der Pop-Tarts eine größere, relative und absolute Menge an Erdbeeren enthalte, als es tatsächlich der Fall ist. Dabei beruft sich die Klage auch auf den eigentlichen positiven gesundheitlichen Aspekt von Erdbeeren, der im Fall der Pop-Tarts ausbliebe. Ebenfalls irreführend soll es sein, dass die Füllung der Pop-Tarts eine erhebliche Menge an "Nicht-Erdbeer-Fruchtzutaten" wie zum Beispiel Apfel und Birne enthält. "Die Klägerin sagte, sie wolle mehr als nur einen "Erdbeergeschmack", den sie jedoch "aufgrund des relativ hohen Anteils an Birnen und Äpfeln nicht erhielt"", wird die Klage von CNN zitiert. Der Konzern habe es außerdem versäumt, Kunden mit Hilfe von Produktbeschreibungen wie "natürlich und künstlich aromatisiert" auf den tatsächlichen Erdbeergehalt hinzuweisen, wie es auch andere Unternehmen tun.
Forderung von fast fĂĽnf Millionen US-Dollar
Insgesamt werden fast fünf Millionen US-Dollar bei der Sammelklage gefordert. Verbraucheranwalt Edgar Dworsky erklärt gegenüber CNN, dass Fälle von Lebensmittelkennzeichnung derzeit höchst aktuell seien. In verschiedenen Gerichtsverfahren ginge es um diesen Bereich und das Endergebnis sei meist nur schwer vorauszusehen. "Einige Richter sind der Meinung, dass die Verkäufer ihre Produkte falsch dargestellt haben, während andere sagen, dass der Verbraucher, wenn er sich die Zeit nähme, die Zutatenliste zu lesen, genau wüsste, was er kauft", so Dworsky gegenüber CNN. In Bezug auf die Pop-Tarts-Klage habe er das Gefühl, dass die Kläger keinen Erfolg haben würden.
E. Schmal / Redaktion finanzen.net
bron: https://www.finanzen.net/nachricht/geld ... s-10700502
Cijfers vierde kwartaal op 10/02/2022
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Sterke resultaten.
Al meer dan 10% erbij sinds update. Op nr de 44 dollar
Al meer dan 10% erbij sinds update. Op nr de 44 dollar
Re: The Kraft Heinz Company
Summary
Campbell's Q2 FY ’22 results were nothing to write home about, with QoQ declines in organic net sales, EBIT, and EPS.
Still, Campbell's management has re-affirmed its full-year forecast for FY ’22, betting on a second-half recovery.
Given recent performance, a decision to keep a long position in the stock is not clear-cut, but I maintain that CPB can continue to function as a bond-proxy.
A Tough Quarter For Campbell, But Guidance Steady
Campbell’s (CPB) investors can’t say they weren’t warned. Management was clear during their review of Q1 FY ’22 results that Q2 might look a bit ugly due to labor and material constraints. Which makes me wonder a bit why investors sent shares down so sharply heading into the company’s recent earnings call. Granted, the firm missed expectations, but it wasn’t necessarily the biggest “whiff” either. Nonetheless, with the aforementioned concerns mated with higher-than-expected inflation and ongoing challenges related to the pandemic, we have the following results for the second quarter ending January 30, 2022:
- (2)% QoQ decline in organic net sales. Organic net sales dipped to $2,207M versus $2,256M in the prior-year period.
- Both the Meals & Beverages (“M&B”) and Snacks segments reported declining organic net sales QoQ. M&B and - Snacks organic sales fell to $1,273M and $934M respectively versus $1,295M and $961M in the prior period.
- Adjusted gross margin down (340) bps QoQ. Adjusted gross margin dipped to 30.4% QoQ. As a reference, adjusted gross margin also declined QoQ in Q1 FY ’22 to 32.5%, reflecting a (200) bps loss.
- Adjusted EBIT of $318M down (17)% QoQ. Adjusted EBIT was $382M in the prior period.
- Adjusted EPS of $0.69 down (16)% QoQ. Adjusted EPS was $0.82 in the prior period.
Still, management is “sticking to their guns”. They have re-affirmed full-year guidance, betting on a second-half recovery.
Should long investors also “stick to their guns”, or is it time to think about heading for the exit?
Keeping the Faith on CPB
When I last wrote about CPB, I suggested long investors might consider a play in the stock, not so much because they could expect to hit a “home run”, but because a position could function as a bond proxy whereby one collects a healthy dividend against shares that may hold up reasonably well during bad times and good times alike. I argued further that management’s current strategy to simplify the business may prove more “durable” over the long run versus one that is more ambitious and more risky such as that of Mondelez (MDLZ) where the firm is attacking many more categories in multiple geographies worldwide.
Time will tell if my thesis proves correct. But, in the meantime, I am more interested to understand how CPB intends to get the business “back on course”. On that point, management highlighted 4 underlying causes for the recent drag on performance:
Labor and materials constraints.
Significant inflation, namely commodity and logistics cost inflation.
Omicron surge.
Difficult comps.
Of course, these are not isolated causes but are rather interrelated. Thus, any improvements in a given area would likely be associated with improvements elsewhere. Management offers investors an optimistic set of resolutions moving into the back-half of the year (quotes below are taken from the company’s Q2 FY ’22 earnings call transcript):
While overall volume in Q2 was impacted (negatively) by labor and materials constraints, CPB expects a supply recovery in the second half of the year complemented by an improved labor picture.
CPB management is “…certainly…not expecting inflation to subside” and thus variability will continue with respect to commodity and logistics costs. However, heading into Q3, the firm is “…fairly well covered [in terms of costs with roughly]…90% [coverage] on commodities.” Further, CPB anticipates that the “…second wave of pricing [actions]” and continued expense reduction efforts will help offset any ongoing inflationary impacts.
Prior to Q2, management had “…anticipated a trajectory of recovery that was [expected to begin] through the second quarter into the back half.” But, the start of the recovery was delayed due to the sudden onset of the Omicron variant in December 2021 and January 2022. Yet, CPB notes that “…[the] good news…is that, although [the Omicron variant] came fast and furiously into the quarter, it also subsided a lot faster than [the company had] seen [with] prior [variants]. And so it allowed [the company] to get back on track.”
Let us recall that CPB benefitted from pandemic-related-everyone-is-stuck-at-home tailwinds that drove strong results in Q1 FY ’21 and Q2 FY ’21. Correspondingly, results in Q3 FY ’21 and Q4 FY ’21 were much weaker as the early effects of the pandemic started to ease. Accordingly, CPB’s Q3 FY ’22 and Q4 FY ’22 comps will be much more forgiving, lending support to a second-half recovery. Further, continued product demand and additional second-half capacity, particularly in snacks, should bolster the top-line.
Personally, I think management has laid out a reasonably strong case for the remainder of the fiscal year. At the same time, I acknowledge a few points of concern. For one thing, the Snacks segment, which is supposed to be CPB’s growth driver, actually performed worse on the top-line (on a percentage basis) during Q2 than the M&B segment. Of course, this is just a single data point and one should not extrapolate too much from it. But, it is certainly not an encouraging performance. As a second point of concern, management has touted its pandemic-related gains with consumers who flocked to Campbell’s products when many families chose (or were forced to choose) home-prepared meals. Consumers being the fickle creatures that they are, it’s not clear those gains will last. Finally, it is well understood that private labels can gain significant share from established brands during periods of high inflation. With ~30% of CPB’s revenues coming from Walmart (WMT) and Kroger (KR), there is always the risk that their share with those customers may erode as inflation remains persistent.
Closing Thoughts
Coming back to my question of whether long investors should stick with the stock, I’m not sure the answer is so clear-cut. From my point of view, management has provided a convincing argument that the remainder of fiscal 2022 should be far stronger than the first half – likely leading to an improvement in the share price. On the other hand, recent performance might call into question CPB’s ability to track against its long-term growth algorithm.
bron: https://seekingalpha.com/article/449515 ... 22-results?
Campbell's Q2 FY ’22 results were nothing to write home about, with QoQ declines in organic net sales, EBIT, and EPS.
Still, Campbell's management has re-affirmed its full-year forecast for FY ’22, betting on a second-half recovery.
Given recent performance, a decision to keep a long position in the stock is not clear-cut, but I maintain that CPB can continue to function as a bond-proxy.
A Tough Quarter For Campbell, But Guidance Steady
Campbell’s (CPB) investors can’t say they weren’t warned. Management was clear during their review of Q1 FY ’22 results that Q2 might look a bit ugly due to labor and material constraints. Which makes me wonder a bit why investors sent shares down so sharply heading into the company’s recent earnings call. Granted, the firm missed expectations, but it wasn’t necessarily the biggest “whiff” either. Nonetheless, with the aforementioned concerns mated with higher-than-expected inflation and ongoing challenges related to the pandemic, we have the following results for the second quarter ending January 30, 2022:
- (2)% QoQ decline in organic net sales. Organic net sales dipped to $2,207M versus $2,256M in the prior-year period.
- Both the Meals & Beverages (“M&B”) and Snacks segments reported declining organic net sales QoQ. M&B and - Snacks organic sales fell to $1,273M and $934M respectively versus $1,295M and $961M in the prior period.
- Adjusted gross margin down (340) bps QoQ. Adjusted gross margin dipped to 30.4% QoQ. As a reference, adjusted gross margin also declined QoQ in Q1 FY ’22 to 32.5%, reflecting a (200) bps loss.
- Adjusted EBIT of $318M down (17)% QoQ. Adjusted EBIT was $382M in the prior period.
- Adjusted EPS of $0.69 down (16)% QoQ. Adjusted EPS was $0.82 in the prior period.
Still, management is “sticking to their guns”. They have re-affirmed full-year guidance, betting on a second-half recovery.
Should long investors also “stick to their guns”, or is it time to think about heading for the exit?
Keeping the Faith on CPB
When I last wrote about CPB, I suggested long investors might consider a play in the stock, not so much because they could expect to hit a “home run”, but because a position could function as a bond proxy whereby one collects a healthy dividend against shares that may hold up reasonably well during bad times and good times alike. I argued further that management’s current strategy to simplify the business may prove more “durable” over the long run versus one that is more ambitious and more risky such as that of Mondelez (MDLZ) where the firm is attacking many more categories in multiple geographies worldwide.
Time will tell if my thesis proves correct. But, in the meantime, I am more interested to understand how CPB intends to get the business “back on course”. On that point, management highlighted 4 underlying causes for the recent drag on performance:
Labor and materials constraints.
Significant inflation, namely commodity and logistics cost inflation.
Omicron surge.
Difficult comps.
Of course, these are not isolated causes but are rather interrelated. Thus, any improvements in a given area would likely be associated with improvements elsewhere. Management offers investors an optimistic set of resolutions moving into the back-half of the year (quotes below are taken from the company’s Q2 FY ’22 earnings call transcript):
While overall volume in Q2 was impacted (negatively) by labor and materials constraints, CPB expects a supply recovery in the second half of the year complemented by an improved labor picture.
CPB management is “…certainly…not expecting inflation to subside” and thus variability will continue with respect to commodity and logistics costs. However, heading into Q3, the firm is “…fairly well covered [in terms of costs with roughly]…90% [coverage] on commodities.” Further, CPB anticipates that the “…second wave of pricing [actions]” and continued expense reduction efforts will help offset any ongoing inflationary impacts.
Prior to Q2, management had “…anticipated a trajectory of recovery that was [expected to begin] through the second quarter into the back half.” But, the start of the recovery was delayed due to the sudden onset of the Omicron variant in December 2021 and January 2022. Yet, CPB notes that “…[the] good news…is that, although [the Omicron variant] came fast and furiously into the quarter, it also subsided a lot faster than [the company had] seen [with] prior [variants]. And so it allowed [the company] to get back on track.”
Let us recall that CPB benefitted from pandemic-related-everyone-is-stuck-at-home tailwinds that drove strong results in Q1 FY ’21 and Q2 FY ’21. Correspondingly, results in Q3 FY ’21 and Q4 FY ’21 were much weaker as the early effects of the pandemic started to ease. Accordingly, CPB’s Q3 FY ’22 and Q4 FY ’22 comps will be much more forgiving, lending support to a second-half recovery. Further, continued product demand and additional second-half capacity, particularly in snacks, should bolster the top-line.
Personally, I think management has laid out a reasonably strong case for the remainder of the fiscal year. At the same time, I acknowledge a few points of concern. For one thing, the Snacks segment, which is supposed to be CPB’s growth driver, actually performed worse on the top-line (on a percentage basis) during Q2 than the M&B segment. Of course, this is just a single data point and one should not extrapolate too much from it. But, it is certainly not an encouraging performance. As a second point of concern, management has touted its pandemic-related gains with consumers who flocked to Campbell’s products when many families chose (or were forced to choose) home-prepared meals. Consumers being the fickle creatures that they are, it’s not clear those gains will last. Finally, it is well understood that private labels can gain significant share from established brands during periods of high inflation. With ~30% of CPB’s revenues coming from Walmart (WMT) and Kroger (KR), there is always the risk that their share with those customers may erode as inflation remains persistent.
Closing Thoughts
Coming back to my question of whether long investors should stick with the stock, I’m not sure the answer is so clear-cut. From my point of view, management has provided a convincing argument that the remainder of fiscal 2022 should be far stronger than the first half – likely leading to an improvement in the share price. On the other hand, recent performance might call into question CPB’s ability to track against its long-term growth algorithm.
bron: https://seekingalpha.com/article/449515 ... 22-results?
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Consumer staples stocks buck broader market selloff
Jun. 10, 2022
Consumer staples stocks served their purpose as safe havens amid market volatility on Friday.
An overheated CPI print on Friday morning prompted a widespread selloff that hit everything from tech to energy to financials. Amid the bearish action, only a select few S&P stocks were left hanging onto only modest gains.
Indeed, only 20 stocks in the S&P were able to muster a gain of more than 1% shortly before Friday’s close while about half of the index’s 504 stocks marked a greater than 2% decline. Gold miner Newmont Corporation (NEM +4.0%) led the index, while Illumina (ILMN -9.1%) Caesars Entertainment (CZR -8.8%) and Etsy (ETSY -8.6%) jockeyed for position as the worst performer shortly before the close of the week.
Yet, of particular note on a sector basis was the performance of consumer staples stocks that made up the bulk of the index’s gainers on a down day for major indices, reflected in the action of the Consumer Staples Select Sector SPDR Fund (XLP +0.2%). As inflation worries increase and high-flying tech stocks are crushed, the slow and steady staples stocks appeared to serve their slow and steady purpose.
Notable gainers in afternoon trading included:
The Hershey Company (NYSE:HSY +2.2%)
Altria (NYSE:MO +1.3%)
Philip Morris (NYSE:PM +1.4%)
Kroger Company (NYSE:KR +1.8%)
Kellogg Company (K +1.9%)
Hormel Foods Corporation (HRL +1.7%)
JM Smucker (SJM +1.3%)
McCormick & Company (MKC +0.7%) +1.3%)
Conagra Brands (CAG +1.2%)
Kraft Heinz (KHC +0.7%)
General Mills (GIS +1.1%)
PepsiCo. (PEP +0.5%)
Kimberly Clark Corporation (KMB +0.8%)
Colgate Palmolive (CL +0.3%)
Church & Dwight (CHD +0.1%)
Procter & Gamble (PG +0.2%)
Campbell Soup Company (CPB +0.2%)
bron: https://seekingalpha.com/news/3847786-c ... et-selloff
those shares bucked the market trend = deze aandelen gingen tegen de markttrend in
Husky34 liked last! Jun. 10, 2022
Consumer staples stocks served their purpose as safe havens amid market volatility on Friday.
An overheated CPI print on Friday morning prompted a widespread selloff that hit everything from tech to energy to financials. Amid the bearish action, only a select few S&P stocks were left hanging onto only modest gains.
Indeed, only 20 stocks in the S&P were able to muster a gain of more than 1% shortly before Friday’s close while about half of the index’s 504 stocks marked a greater than 2% decline. Gold miner Newmont Corporation (NEM +4.0%) led the index, while Illumina (ILMN -9.1%) Caesars Entertainment (CZR -8.8%) and Etsy (ETSY -8.6%) jockeyed for position as the worst performer shortly before the close of the week.
Yet, of particular note on a sector basis was the performance of consumer staples stocks that made up the bulk of the index’s gainers on a down day for major indices, reflected in the action of the Consumer Staples Select Sector SPDR Fund (XLP +0.2%). As inflation worries increase and high-flying tech stocks are crushed, the slow and steady staples stocks appeared to serve their slow and steady purpose.
Notable gainers in afternoon trading included:
The Hershey Company (NYSE:HSY +2.2%)
Altria (NYSE:MO +1.3%)
Philip Morris (NYSE:PM +1.4%)
Kroger Company (NYSE:KR +1.8%)
Kellogg Company (K +1.9%)
Hormel Foods Corporation (HRL +1.7%)
JM Smucker (SJM +1.3%)
McCormick & Company (MKC +0.7%) +1.3%)
Conagra Brands (CAG +1.2%)
Kraft Heinz (KHC +0.7%)
General Mills (GIS +1.1%)
PepsiCo. (PEP +0.5%)
Kimberly Clark Corporation (KMB +0.8%)
Colgate Palmolive (CL +0.3%)
Church & Dwight (CHD +0.1%)
Procter & Gamble (PG +0.2%)
Campbell Soup Company (CPB +0.2%)
bron: https://seekingalpha.com/news/3847786-c ... et-selloff
those shares bucked the market trend = deze aandelen gingen tegen de markttrend in
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Kellogg splitst zichzelf op in drie onafhankelijke beursgenoteerde bedrijven: snack-, graan- en
plantaardige activiteiten. "Deze activiteiten hebben allemaal een aanzienlijk standalone-potentieel, en
een sterkere focus zal hen in staat stellen om hun middelen beter te richten op hun verschillende
strategische prioriteiten," zei CEO Cahillane. De Noord-Amerikaanse graanactiviteiten en de
plantaardige divisie van Kellogg waren vorig jaar samen goed voor ongeveer 20% van de omzet. De
overige activiteiten zijn snacks, noedels, internationale ontbijtgranen en Noord-Amerikaanse
diepvriesontbijtmerken, die samen goed waren voor ongeveer 80% van de omzet in 2021.
bron: BBT_Ontbijt_22.06.2022
plantaardige activiteiten. "Deze activiteiten hebben allemaal een aanzienlijk standalone-potentieel, en
een sterkere focus zal hen in staat stellen om hun middelen beter te richten op hun verschillende
strategische prioriteiten," zei CEO Cahillane. De Noord-Amerikaanse graanactiviteiten en de
plantaardige divisie van Kellogg waren vorig jaar samen goed voor ongeveer 20% van de omzet. De
overige activiteiten zijn snacks, noedels, internationale ontbijtgranen en Noord-Amerikaanse
diepvriesontbijtmerken, die samen goed waren voor ongeveer 80% van de omzet in 2021.
bron: BBT_Ontbijt_22.06.2022
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Campbell Soup: I Love Its Products But I Will Stay On The Sidelines
Sep. 29, 2022
Summary
In this article, I want to share another piece of research of a company in the Packaged Foods and Meats Industry.
Campbell Soup owns superior brands that are among consumer favorites.
We will look at the latest results and the possible returns.
Introduction
This article may start with a disclaimer: I am a big fan of Pepperidge Farm Goldfish and Milano cookies. Since I want to invest in companies I am familiar with, I started researching about Pepperidge Farm. This is what brought me to Campbell Soup (NYSE:CPB), the current owner of this beloved brand. However, as much as I love some of its products, I would like to share why at the moment I currently rate the company as hold, meaning that investors who already own the company may do well sticking with it, but investors who wish to initiate a position in the stock should and could wait for a more reasonable valuation.
Summary of previous coverage
This article can be seen as the fourth episode of a series in which I started researching and covering some of the most important players in the Packaged Food and Meats Industry. The main reasons I am looking at this industry are the following:
They sell products that everybody always needs. In other words, they are consumer non-cyclical companies
They usually enjoy high gross profit margin and a good return on common equity
They are able to return excess cash to the shareholders with interesting yields
In my previous articles I looked at The Kraft Heinz Company (KHC); The Hershey Company (HSY) and Hormel Foods (HRL).
The company
The company started its journey back in 1869 when Mr. Campbell, a fruit and vegetable vendor and Mr. Anderson, a commercial canner and packer formed their company. In 1922 the company officially became Campbell Soup Company. In 1961 the company acquired the brand that led me to research the company: Pepperidge Farm, a baked goods company founded by Margaret Rudkin. I would like to spend a few words on this business woman and her history because I think it is worth knowing. She lived in Fairfield, Connecticut on a property called Pepperidge Farm. She began baking all-natural stone ground whole wheat bread for her youngest son who suffered from severe allergies and asthma and couldn't eat most commercially processed foods. Bear in mind that at that time Mrs. Rudkin had never baked in her life. Her bread eventually turned out to be so good that her son's doctor prescribed it to other patients. This made her approach her local grocery store to see if he would be selling her bread. The grocer at first was reluctant but once he gave a taste he changed his mind. The rest is a beautiful growth story that led to the recalled acquisition of Pepperidge Farm by Campbell Soup.
Campbell Soup is mainly focused on North America which can be an advantage at the moment, given the strength of the U.S. dollar and the hit that many American companies are taking on their international sales. As shown below, the company has two divisions: Snacks and Meals & Beverages, which account respectively for 46% and 54% of sales. This makes the company's portfolio well-balanced with many leading brands in 13 core categories...
meer op: https://seekingalpha.com/article/454378 ... -sidelines?
Husky34 liked last! Sep. 29, 2022
Summary
In this article, I want to share another piece of research of a company in the Packaged Foods and Meats Industry.
Campbell Soup owns superior brands that are among consumer favorites.
We will look at the latest results and the possible returns.
Introduction
This article may start with a disclaimer: I am a big fan of Pepperidge Farm Goldfish and Milano cookies. Since I want to invest in companies I am familiar with, I started researching about Pepperidge Farm. This is what brought me to Campbell Soup (NYSE:CPB), the current owner of this beloved brand. However, as much as I love some of its products, I would like to share why at the moment I currently rate the company as hold, meaning that investors who already own the company may do well sticking with it, but investors who wish to initiate a position in the stock should and could wait for a more reasonable valuation.
Summary of previous coverage
This article can be seen as the fourth episode of a series in which I started researching and covering some of the most important players in the Packaged Food and Meats Industry. The main reasons I am looking at this industry are the following:
They sell products that everybody always needs. In other words, they are consumer non-cyclical companies
They usually enjoy high gross profit margin and a good return on common equity
They are able to return excess cash to the shareholders with interesting yields
In my previous articles I looked at The Kraft Heinz Company (KHC); The Hershey Company (HSY) and Hormel Foods (HRL).
The company
The company started its journey back in 1869 when Mr. Campbell, a fruit and vegetable vendor and Mr. Anderson, a commercial canner and packer formed their company. In 1922 the company officially became Campbell Soup Company. In 1961 the company acquired the brand that led me to research the company: Pepperidge Farm, a baked goods company founded by Margaret Rudkin. I would like to spend a few words on this business woman and her history because I think it is worth knowing. She lived in Fairfield, Connecticut on a property called Pepperidge Farm. She began baking all-natural stone ground whole wheat bread for her youngest son who suffered from severe allergies and asthma and couldn't eat most commercially processed foods. Bear in mind that at that time Mrs. Rudkin had never baked in her life. Her bread eventually turned out to be so good that her son's doctor prescribed it to other patients. This made her approach her local grocery store to see if he would be selling her bread. The grocer at first was reluctant but once he gave a taste he changed his mind. The rest is a beautiful growth story that led to the recalled acquisition of Pepperidge Farm by Campbell Soup.
Campbell Soup is mainly focused on North America which can be an advantage at the moment, given the strength of the U.S. dollar and the hit that many American companies are taking on their international sales. As shown below, the company has two divisions: Snacks and Meals & Beverages, which account respectively for 46% and 54% of sales. This makes the company's portfolio well-balanced with many leading brands in 13 core categories...
meer op: https://seekingalpha.com/article/454378 ... -sidelines?
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Conagra Brands (+4%) verhoogde de jaarverwachtingen nadat de kwartaalwinst vorige kwartaal ver
boven de lat uitkwam. De groep profiteerde immers van hogere prijzen voor snacks en kant-en-klare
maaltijden, wat de hogere grondstoffenprijzen compenseerde: de volumes daalden met 8%, maar de
omzet steeg met 17%. Eerder al meldden Campbell Soup, General Mills en Kellogg’s soortgelijk nieuws.
Conagra verwacht nu een autonome omzetstijging van 7% en 8% voor het hele jaar 2023, exclusief
wisselkoersen en consolidatie, terwijl eerder nog op 4% tot 5% groei werd gemikt. De aangepaste winst
per aandeel kan 10% Ă 14% hoger op jaarbasis, terwijl de lat eerder nog op +1% tot +5% lag.
bron: beurs bij t ontbijt 6/01/23
Husky34 liked last! boven de lat uitkwam. De groep profiteerde immers van hogere prijzen voor snacks en kant-en-klare
maaltijden, wat de hogere grondstoffenprijzen compenseerde: de volumes daalden met 8%, maar de
omzet steeg met 17%. Eerder al meldden Campbell Soup, General Mills en Kellogg’s soortgelijk nieuws.
Conagra verwacht nu een autonome omzetstijging van 7% en 8% voor het hele jaar 2023, exclusief
wisselkoersen en consolidatie, terwijl eerder nog op 4% tot 5% groei werd gemikt. De aangepaste winst
per aandeel kan 10% Ă 14% hoger op jaarbasis, terwijl de lat eerder nog op +1% tot +5% lag.
bron: beurs bij t ontbijt 6/01/23
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
Re: The Kraft Heinz Company
Conagra: High Leverage And Rich Valuation, Hold For Now
Dec. 20, 2022
Summary
Price increases bolster sales, but the decline in volume may accelerate.
High debt reduces financial flexibility.
Good dividend yield but overvalued.
Conagra Brands (NYSE:CAG) has delivered good sales growth with minimal impact on profit margins. But the consumer staples sector has benefitted from an inflow of cash from investors looking for a haven during these turbulent times. The stock has run up a lot and is overvalued. The company has grown its dividend in the past few years but carries high debt. Long-term holders may be better off holding on to their shares. New investors or anyone looking to add to their holdings may be better off waiting for a lower valuation.
Lower elasticities and price increases drive sales.
The company has seen good revenue growth in this slowing economy, driven by price increases. The company came off very high demand in 2020, so some of the drop in sales volumes in Q4 2021 can be attributed to the normalization of demand during that quarter. Overall, the double-digit price increases may be starting to take their toll on volumes with a steady decline. Across many companies in the consumer staples sector, volume declines have been muted in the face of these enormous price increases. So far, these muted price elasticities may have emboldened the company's management. But consumers will get a sticker shock looking at their grocery bills, reducing consumption, and switching to lower-priced private label brands. However, private-label brands are facing the same inflationary pressures.
The company was able to mitigate most of the impact on its adjusted gross margins [non-GAAP] with the help of price increases. Its adjusted gross margin in Q1 2023 fell by 54 basis points compared to the previous year (Exhibit 2). The company found manufacturing issues in FY Q1 2023, which ended in August 2022, in some of its product lines that caused lost time, product loss, and supply chain inefficiencies, leading to decreased gross and operating profit margins
Sean Connolly [CEO] highlighted the lower price elasticities which helped drive sales growth in Q1 2023:
We had robust net sales growth across our portfolio, mainly due to the impact of our inflation-driven pricing actions coupled with ongoing limited elasticities.
Inflation is still hot, with a 7.1% year-over-year increase in November Consumer Price Index [CPI]. The Producer Price Index, which measures inflation from the perspective of domestically produced goods, services, and construction, increased year-over-year by 7.4% in November 2022. In a sign that inflation-related price increases are taking a toll, analysts note reduced spending during this year's holidays.
Good dividend growth but a poor track record of share repurchases
The company has an ineffective share repurchase program. Conagra has spent $2.7 billion buying back its shares since 2013 (Exhibit 4), but its share count has increased by 64 million or 15% (Exhibit 5). The company issued shares worth $1.6 billion between 2013 and 2022; in effect, the company bought back shares worth $1.08 billion during the past decade.
The shares currently yield a respectable 3.47% but much less than the 2-year US Treasury yield of 4.3%. The company has grown its dividend from 0.85 per share in 2020 to $1.25 per share in 2022. Its forward dividend payout stands at $1.32, an increase of 55% in three years. The payout ratio stands at a manageable 51.9%. The company had TTM operating cash flows of $1.3 billion that can cover its total dividend payout of approximately $600 million.
However, the free cash flow is a concern given its high debt levels. The company has seen a net increase in debt of $2 billion since 2013 (Exhibit 6). The company had net debt of $8.9 billion at the end of Q1 FY 2023, and its net leverage ratio on a non-GAAP basis stands at a high 3.9x.
....
Conagra is Richly Valued
The company is trading at a trailing GAAP PE of 31.9x, compared to a five-year average of 17.8x, and a forward GAAP PE of 19.8x, compared to a five-year average of 15.5x. The company's stock is overvalued at this time. But, as an existing shareholder, I am reluctant to sell this stock. I continue to collect and reinvest dividends, although pausing dividend reinvestment may be an option to consider at these high valuation levels. So, this stock gets a hold rating for existing shareholders. New investors should wait for an attractive entry point.
Conagra’s price hikes have helped grow sales and maintain momentum in the market. But sales volumes have declined, and further price hikes may not be possible without further volume declines. High inflation remains a concern for the economy. The company offers a good dividend yield and has increased its dividend in the past few years, but its share buybacks have not reduced the share count. The company still carries high leverage. The stock is overvalued at current levels."
bron: https://seekingalpha.com/article/456542 ... -elsewhere
Maar heeft gisteren 5/01 wel een Dag Hoog van 40,53 USD gekend
Husky34 liked last! Dec. 20, 2022
Summary
Price increases bolster sales, but the decline in volume may accelerate.
High debt reduces financial flexibility.
Good dividend yield but overvalued.
Conagra Brands (NYSE:CAG) has delivered good sales growth with minimal impact on profit margins. But the consumer staples sector has benefitted from an inflow of cash from investors looking for a haven during these turbulent times. The stock has run up a lot and is overvalued. The company has grown its dividend in the past few years but carries high debt. Long-term holders may be better off holding on to their shares. New investors or anyone looking to add to their holdings may be better off waiting for a lower valuation.
Lower elasticities and price increases drive sales.
The company has seen good revenue growth in this slowing economy, driven by price increases. The company came off very high demand in 2020, so some of the drop in sales volumes in Q4 2021 can be attributed to the normalization of demand during that quarter. Overall, the double-digit price increases may be starting to take their toll on volumes with a steady decline. Across many companies in the consumer staples sector, volume declines have been muted in the face of these enormous price increases. So far, these muted price elasticities may have emboldened the company's management. But consumers will get a sticker shock looking at their grocery bills, reducing consumption, and switching to lower-priced private label brands. However, private-label brands are facing the same inflationary pressures.
The company was able to mitigate most of the impact on its adjusted gross margins [non-GAAP] with the help of price increases. Its adjusted gross margin in Q1 2023 fell by 54 basis points compared to the previous year (Exhibit 2). The company found manufacturing issues in FY Q1 2023, which ended in August 2022, in some of its product lines that caused lost time, product loss, and supply chain inefficiencies, leading to decreased gross and operating profit margins
Sean Connolly [CEO] highlighted the lower price elasticities which helped drive sales growth in Q1 2023:
We had robust net sales growth across our portfolio, mainly due to the impact of our inflation-driven pricing actions coupled with ongoing limited elasticities.
Inflation is still hot, with a 7.1% year-over-year increase in November Consumer Price Index [CPI]. The Producer Price Index, which measures inflation from the perspective of domestically produced goods, services, and construction, increased year-over-year by 7.4% in November 2022. In a sign that inflation-related price increases are taking a toll, analysts note reduced spending during this year's holidays.
Good dividend growth but a poor track record of share repurchases
The company has an ineffective share repurchase program. Conagra has spent $2.7 billion buying back its shares since 2013 (Exhibit 4), but its share count has increased by 64 million or 15% (Exhibit 5). The company issued shares worth $1.6 billion between 2013 and 2022; in effect, the company bought back shares worth $1.08 billion during the past decade.
The shares currently yield a respectable 3.47% but much less than the 2-year US Treasury yield of 4.3%. The company has grown its dividend from 0.85 per share in 2020 to $1.25 per share in 2022. Its forward dividend payout stands at $1.32, an increase of 55% in three years. The payout ratio stands at a manageable 51.9%. The company had TTM operating cash flows of $1.3 billion that can cover its total dividend payout of approximately $600 million.
However, the free cash flow is a concern given its high debt levels. The company has seen a net increase in debt of $2 billion since 2013 (Exhibit 6). The company had net debt of $8.9 billion at the end of Q1 FY 2023, and its net leverage ratio on a non-GAAP basis stands at a high 3.9x.
....
Conagra is Richly Valued
The company is trading at a trailing GAAP PE of 31.9x, compared to a five-year average of 17.8x, and a forward GAAP PE of 19.8x, compared to a five-year average of 15.5x. The company's stock is overvalued at this time. But, as an existing shareholder, I am reluctant to sell this stock. I continue to collect and reinvest dividends, although pausing dividend reinvestment may be an option to consider at these high valuation levels. So, this stock gets a hold rating for existing shareholders. New investors should wait for an attractive entry point.
Conagra’s price hikes have helped grow sales and maintain momentum in the market. But sales volumes have declined, and further price hikes may not be possible without further volume declines. High inflation remains a concern for the economy. The company offers a good dividend yield and has increased its dividend in the past few years, but its share buybacks have not reduced the share count. The company still carries high leverage. The stock is overvalued at current levels."
bron: https://seekingalpha.com/article/456542 ... -elsewhere
Maar heeft gisteren 5/01 wel een Dag Hoog van 40,53 USD gekend
Buy and Hold blijft mijn strategie, tenzij een aandeel 20 percent gestegen is in een periode van enkele weken/maanden na aankoop.
