This is a negative commentary on Kraft's ability to deliver shareholder value over the long term. Day or short term traders looking for a point or 2 rise or drop need not read any further. Kraft's original IPO ten years ago was at about $30. Today's price is $30 dollars. During that time period Kraft has bought and assimilated other companies, each time claiming they would generate savings and economies of scale. Aquisition of Nabisco, Danone and recently Cadburry (among others) has added to the growth mystique, but is it good growth? All these are done for very sound business reasons, non of which Kraft management can ever seem to capitalize on. Identifying opportunites and then capitalizing on them are 2 different skill sets; Kraft management lacks in the latter. Execution of a detailed plan requires detail oriented,skilled people. Kraft is loaded with some very bright people that have a broad knowledge base, unfortunately lacking in depth skill sets(except power point presentations). The assimilation of Nabisco into the Kraft philosophy has not been successful and the cultural differences were great. The will of Kraft was eventually imposed. The knowledge base of skilled, dedicated people was eliminated, and simplistically nieve models were put in place. That,coupled with a revolving door policy of VP's and directors that have them shuffling around every 2 years, punching their tickets for promotion. It is a wonder that Nabisco can still make a cookie! Some say their shop floor losses are horendous. Kraft also had a disastrous assimilation of General Foods back when PM owned Kraft in the late 80's. Their deep knowledge base was packaged off wholesale. There is a basic misconception to this day that specific knowledge can be bought on the outside. True to a degree, but that doesn't include an in depth knowledge of your business and processes. Cadbury will probably be the latest victim to be dismantled by Kraft. The one shoe fits all mentality of Kraft thinking will stymie even the most open minded. I hope I am wrong and something good comes of that merger. But if history repeats itself, Kraft will under deliver again. An exodus of good employees (coerced or otherwise) can be seen, especially taking into consideration that Kraft is not on the same payscale level as Cadbury. So those of you that are holding Kraft expecting long term growth while picking up a 3% dividend, my advice is to go buy a company that really pays a good dividend, whose management has a track record of being able to capitlize on aquisitions and grow their business.
Thanks for the compliment calling me genius, I'm sure it came straight from the heart. Perhaps you should get out of your box and take a look at how some better food companies performed during the same time period. No need to thank me for doing your homework. Compare KFT vs HSY vs HNZ vs CMB. They are Kraft piers and the group that Kraft rates itself against. So quit with the trite accolades and lets talk facts if you have any! See Link Below
I am a short term options player. I liked your discourse regarding Kraft
assuming the "facts" you
presented are true. I don't have the motivation to check them out BUT it's not relevant to the
option trade I posted above. Ignore the "if your not long or posting positive info" you are nuts responses. They are from losers.
I do not have any kind of position in Kraft stock. Look at the yahoo chart for Kraft - Maximum. At what price did it start, and where is it today? They've made numerous aquisitions (google Kraft and you can pick up who they have aquired over the last 10 years. There were great expectations to release shareholder value in those investments. They were not executed properly. I have been in corporate life too long and know that kind of culture very well. I have seen what they have done and talked to a lot of people much closer to the situation (that were acquired by Kraft). My interpretations of what I have seen and heard may not be entirely objective but I think it is a fair assesment. Also my comments were not geared to anyone playing options or short term trades but offered as an assesment and food for thought for the long term investor. Good Luck