While I realize that Wall Street typically prices stocks on the basis of
what investors believe a company will look like in the future, I'm
still surprised by the relative valuations that come out of the process.
Take the case of Mondelez (Nasdaq:MDLZ).
This company is focused on multiple growth areas in the packaged food
space (and has a large developing market exposure) and does indeed post
better growth than many of its peers, but the overall combination of
growth and margins wouldn't normally seem to argue for valuation on par
with Kellogg (NYSE:K) or Nestle (Nasdaq:NSRGY).
Consequently, although I do expect Mondelez to do well relative to its
sector in terms of reported growth, I continue to believe that valuation
is already too steep.
Read more here:
http://www.investopedia.com/stock-analysis/050813/mondelez-isnt-good-nestle-priced-it-mdlz-k-nsrgy-pep-krft.aspx
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