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Mondelez International, Inc. Message Board

  • my911jim993 my911jim993 Nov 24, 2010 12:52 PM Flag

    Kraft - Great Investment From Here

    Kraft is one of those rare finds right now. Reminds me of Anheuser Busch back in the 2000's before the inbev takeover. It's unloved, is undervalued on the fundamental metrics, pays a good yield, has tremendous free cash flows, has a great yet unexciting portfolio of top brands, and is about as stable a company as they come. There are good potential synergies with the cadbury takeover. The company also can leverage the cadbury distribution channels in markets that kraft's core products haven't had much penetration, as well as the ability to leverage the kraft distribution network to push cadbury products in markets where it's had little penetration. The longer this company stays unloved, the more I can add to my position. In time, the market will wake up to this company's true value. Until then, I expect we'll see the dividend increased again in the not so distant future and would not be surprised to see the company begin buying back shares as the cadbury integration progresses. My thoughts and humble opinion anyway. Good luck to all and Happy Turkey Day!

    Best Regards,


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    • Thanks to all of you for the civil discussion. For what it is worth I am up 14% since my purchase a year and half ago. Reinvesting the dividends and waiting for an opportunity to buy more, hopefully around $30. good luck all and thanks again.

    • While I'm not a big fan of current management, I still believe the company is undervalued and a purchase at this price will pay off over time. I realize everyone states that the stock has done nothing over 10 years, and while that's true on a price appreciation standpoint for kraft, it is also true of the broader market. However, had you reinvested those dividends over that period, you would have outpaced the market. The difference now, vs. 10 years ago are many. Since 2000 you've seen the following changes:

      1 - cash flow per share has increased 30%
      2 - sales per share have increased 55%
      3 - EPS have increased 48.5%
      4 - dividends went from nothing in 2000 to .26 per share in 2001. Since 2001 dividends have increased 346% to 1.16 per share

      In 2000, I didn't think kraft was worth the, with the fundamentals greatly improved, I believe kraft is quite undervalued and has a nice margin of safety. Even in spite of management I'm not too thrilled with, the stock should be valued much higher. Just my humble opinion. Time will tell whether I've seen this correctly, or whether I've wasted my time. I'm betting on a nice return.

      Best Regards,


    • this post could have been written 10 yrs ago folks

    • 10 years is long enough to wait without enhanced shareholder results regarding this dog. People are dreaming if they think more time is the answer. This company is just too big and unfocussed with sub par, bloated and over paid management. Sell off the parts and remit the cash to the shareholders!

    • Agreed, for the most part. I don't see KFT growing to the point of a 2-for-1 anytime soon, but with dividends should help us over the long term.

    • Jim,
      Your post is a very positive one and well stated, however' I have some differing opinions to put forward.

      Kraft would be a "rare find" as you stated, if the right present management were in place. Currently you have Irene trying to convince Wall Street that she has it figured out and the rest of us don't understand what she is doing. She is buying time for a buyout package for herself because she has no idea what to do. Kraft has been in a 11 year hiatus and she is part of the problem.

      Cadbury will probably be another Kraft bungle (like Danone and Nabisco). Kraft has "managed" Nabisco's numbers down the tubes because of their management style and subsequent incompetancies.("One Shoe Fits All" and Kraft Process versus common sense)

      You state that "The longer this company stays unloved, the more I can add to my position. In time, the market will wake up to this company's true value".
      The market will not wake up until long after Kraft can do something right. They have a very poor track record regarding delivering results. (Ten years is a pretty good indication of their ineptitude). Also, there is nothing in the offing that would indicate that Kraft would increase their dividend.

      The best of luck in your investment in Kraft. keep other options open.


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