The way many sell-side analysts talk about Kraft Foods (Nasdaq:KRFT)
and the company's CEO Tony Vernon, you would think they make sure to
never go to bed at night before kissing a picture of them both and
writing their names with little hearts substituting for the “o's”. And
this is for a company whose organic growth just hasn't been that good
since the split with Mondelez (Nasdaq:MDLZ).
Now, to be fair, I do think Kraft is a good business and a very
well-run company. In more than a few cases, Kraft either dominates its
category or frankly is the category. Moreover, I like the
motivational approach the company takes toward incentivizing employees,
the company's focus on innovation, and its willingness to shift
resources away from brands that can't carry their own luggage. On the
other hand, while I do share Wall Street's optimism that Kraft will
eventually post margins and free cash flow that are just as good as, if
not leading, its peers, the valuation already assumes precisely that.
Please read more here:
http://www.investopedia.com/stock-analysis/080613/wall-street-all-krafts-improvement-potential-krft-gis-nsrgy-sjm.aspx
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