K

Kellogg Co

Consumer


Presented:04/11/2018
Price:$63.35
Cap:$21.98B
Current Price:$80.93
Cap:$27.90B

Presented

Date04/11/2018
Price$63.35
Market Cap$21.98B
Ent Value$31.94B
P/E Ratio17.5x
Book Value$6.40
Div Yield3.41%
Shares O/S347.00M
Ave Daily Vol3,025,652
Short Int12.34%

Current

Price$80.93
Market Cap$27.90B
Kellogg Co. engages in the manufacturing, marketing, and distribution of cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, and meat alternatives. It operates through the following segments: U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific. The U.S. Morning Foods segment includes cereal, toaster pastries, health and wellness bars, and beverages. The U.S. Snacks segment offers cookies, crackers, cereal bars, savory snacks, and fruit-flavored snacks. The U.S. Specialty segment represents food away from home channels, including food service, convenience, vending, Girl Scouts, and food manufacturing. The North America Other segment includes U.S. Frozen, Kashi, and Canada operating segments. The Europe segment consists of European countries. The Latin America segment comprises of Central and South America and includes Mexico. The Asia Pacific segment composes of Sub-Saharan Africa, Australia, and Asian and Pacific markets. The company was founded by Will Keith Kellogg in 1906 and is headquartered in Battle Creek, MI.

Publicly traded companies mentioned herein: Conagra Brands Inc (CAG), General Mills Inc (GIS), J M Smucker Co (SJM), Kellogg Co (K), Walmart Inc (WMT)

Highlights

The presenter is short shares of Kellogg (K) as part of a thematic bear case on the consumer staples space that has also included, at various points, Conagra, General Mills, and Smuckers. He believes current valuations and multiples do not accurately reflect the reality of the current landscape, wherein consumer staples companies are no longer stable, premium stocks, but are facing serious existential risk in the changing consumer and grocery landscape. He believes initiatives undertaken by the previous management over the course of 2017 gave K short-term reprieve at the cost of a more challenged long-term position, especially given its level of indebtedness.

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Idea Discussion

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