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Alexander J. Poulos  

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  • Long Kraft As The Heinz Merger Radically Transforms The Company [View article]
    barefoot,

    I agree with your CAG comments. KRFT is quite compelling here, significant growth remains post the acquisition. I suspect 3G will be able to unlock it along with the cost cutting.
    Jun 24, 2015. 11:45 AM | Likes Like |Link to Comment
  • Long Kraft As The Heinz Merger Radically Transforms The Company [View article]
    vince,

    Interestingly, CAG jumped on the news of Jana Partners large stake in the company. CAG has underperformed over the past few years due to the ill-times Ralston Purina acquisition. Why get into generic production that is absent a moat? If branded products are having a rough go what makes them think producing the house brand would be better.

    I prefer KRFT and there large stable of well known branded products. I expect the cost cuts will unlock significant value. Let' see how it plays out.
    Jun 24, 2015. 09:53 AM | 2 Likes Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    Mike,

    As you know, it is a high quality company. The low from last year was roughly $88 per share in the first week of August. I suspect Fridays sell-off will mark the bottom for this year. Let me know if you take a position at what price.
    Jun 23, 2015. 10:11 AM | 1 Like Like |Link to Comment
  • Long Kraft As The Heinz Merger Radically Transforms The Company [View article]
    If the merger closes before July 31st, shareholders WILL NOT be entitled to this quarters dividend payment. Lets hope the deal closes in August!

    The Board of Directors of Kraft Foods Group, Inc. (KRFT) today has declared a regular quarterly dividend of $0.55 per share of common stock, payable on July 31, 2015, to shareholders of record on July 27, 2015, provided that the company's proposed merger with H.J. Heinz Holding Corporation (Heinz) does not close on or before July 27, 2015. If the merger closes on or before July 27, 2015, in lieu of Kraft paying its dividend announced today, the combined company The Kraft Heinz Company intends to declare and pay as soon as practicable following the closing of the merger and subject to the approval of its board of directors, a regular quarterly dividend of $0.55 per share of common stock of The Kraft Heinz Company to all shareholders of record of The Kraft Heinz Company as of a record date shortly after the date that the merger is completed.

    Pursuant to the terms of the merger agreement between Kraft and Heinz, the Board of Directors of Kraft today also declared a special cash dividend in the amount of $16.50 per share of common stock, conditioned upon the closing of the proposed merger, payable to Kraft shareholders of record immediately prior to the effective time of the merger. As the special cash dividend is only being paid if the merger with Heinz closes, Kraft shareholders will not receive the special cash dividend unless and until the merger closes.
    Jun 23, 2015. 09:20 AM | 1 Like Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    Uncle Pie,

    Welcome aboard, now sit back and enjoy the ride. The use of leverage for an easy to predict business such as HSY is justified. The cost of debt is far less than the incremental return generated on capital making the move a no-brainer for management. HSY does compete in the higher end with the Scharfen Berger brand as seen here. http://bit.ly/1GvWJu0

    As for the erratic nature of commodities not just the cocoa crop. HSY demand for their product tends to be quite inelastic which allows the company to pass off higher costs to protect margins. Last year the fear was rapidly escalating dairy prices would crimp profitability. HSY responded by handing down a price hike for the all important Halloween season. With dairy prices collapsing in the US, the price hikes remain further enhancing HSY North American profits. Its the iconic power of the brand here that keeps HSY so profitable. Thanks for reading and commenting.
    Jun 22, 2015. 05:10 PM | 2 Likes Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    2Reb,

    I am glad you enjoyed it.
    Jun 22, 2015. 05:03 PM | Likes Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    jim,

    I highly doubt the Trust would ever allow the company to be bought out. I included the reference to indicate the value of the franchise as seen by others. Thanks for reading and commenting.
    Jun 22, 2015. 05:03 PM | Likes Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    steve,

    I expect dividend growth in the high single/low double digit range. The growth should neatly mirror expected eps growth over the same time frame. Thanks for reading and commenting.
    Jun 22, 2015. 05:01 PM | 1 Like Like |Link to Comment
  • Re-Examining My Bullish Thesis On Hershey [View article]
    Keith,

    Thanks. I suspect you will be pleased with your HSY purchase as the years progress. A nice low vol. play with a decent income component. Thanks for reading and commenting.
    Jun 22, 2015. 12:15 PM | Likes Like |Link to Comment
  • Illustrating Why Hershey Remains The Best Value In The Food Processing Space [View article]
    pete,

    I suspect this issues you raised are some that are plaguing HSY in China. The acquisition of Golden Monkey is not proceeding smoothly, they just replaced the head of the transition team recently. That being said, I expect the issues to be addressed shortly, the underlying demand is strong with steady growth for many years ahead.
    Jun 19, 2015. 09:18 PM | Likes Like |Link to Comment
  • Illustrating Why Hershey Remains The Best Value In The Food Processing Space [View article]
    Kolpin,

    I adjusted my DCF to take into account the low end of sales guidance offered. I then flattened growth out for the rest of the decade at 3% the mid point of this years sales hike. I left margins flat over this time frame as well even though HSY has proven to be quiet adept at reducing costs. The model indicates a fair value of $104.48.

    Not sure what the big fuss here is. HSY is getting hit by forex issues similar to other multinationals. The underlying business is strong with sales growth above what I had expected. I am still long here with no intention to reduce the position.
    Jun 19, 2015. 09:16 PM | Likes Like |Link to Comment
  • Illustrating Why Hershey Remains The Best Value In The Food Processing Space [View article]
    Mike,

    If we see it, the down spike will come before the month is out. You will have second quarter "window dressing" were poor performers such as HSY and ORCL will be jettisoned from various fund portfolios.
    Jun 19, 2015. 09:12 PM | Likes Like |Link to Comment
  • Illustrating My Fair Value On The Walt Disney Company [View article]
    Mike,

    Your comment neatly encapsulates why I wind up selling certain positions. The reality is you simply can't buy every attractive company. Thanks for reading and adding to the conversation.
    Jun 17, 2015. 08:46 PM | 2 Likes Like |Link to Comment
  • Illustrating My Fair Value On The Walt Disney Company [View article]
    2Reb,

    And I am there with you, waiting patiently.
    Jun 17, 2015. 08:45 PM | Likes Like |Link to Comment
  • Illustrating My Fair Value On The Walt Disney Company [View article]
    Chancer,

    Take a look at a one year chart of DIS. In the early Oct 2014 time frame, the shares sold off along with the market as a whole. My goal is to watch for an attractive entry point as this will allow for outsized gains. The shares have traded in the $105-$111 range for the past couple of months. Lets see how it plays out.

    As for the Lego question, my research doesn't yield any specific comments. The FOX spat over the release of a new Fantastic Four movie this year against DIS wishes is something to watch. Fox owns the movie rights so if we notice, DIS refuses (rightfully so) to promote the popular group. Universal studios owned by CMCSA is another competitive threat that has multiple rides based on Marvel characters. From what I have read CMCSA plans on redoing some. It will be interesting to watch DIS attempt to regain power over the rich IP content that is Marvel. Keep in mind Sony still has the rights for a few more Spider-man movies easily one of Marvel's most popular characters.
    Jun 16, 2015. 02:31 PM | Likes Like |Link to Comment
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