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Mondelez International, Inc. Message Board

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  • my911jim993 my911jim993 Nov 30, 2010 10:55 AM Flag

    Kraft - Great Investment From Here

    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 investment...today, 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,

    -jim

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    • Anyone here think KFT could be a buyout target ?

      :)

      • 1 Reply to cat_tracker_2000
      • given Kraft's size there is not a company in the world that would attempt a takeover (anti-trust concerns in the US, same thing but called anti-competition overseas).

        If you look at it seriously, you'll see that Kraft is trying to emulate Nestles...latter sucked big time for a long time but they managed to re-arrange their portfolio to shed ground coffee (a commodity) and pick up pet foods and increase their presence in "convenience foods". I see Kraft continuing down that path but it took Nestles 10 years to do it. Kraft was almost there but has sold pizza (to Nestles) so I think they took a step back.

 
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