Stock price: €20.2 ($29.8)
Conclusion: Top line slowing down at a time when peers are accelerating. Never ending restructuring. Better opportunities elsewhere (cf our Nestle (NSRGY.PK) comment) based on our estimated fair value range of €19-21 ($28-31) per share.

Q3 results: Sales down 2% reported (-1% 9m to €30.1bn), up 3.4% like for like (+4.1% 9m). Adjusted EPS up 5% in Q3 (-6% 9m), down 34% reported. Guidance 2009: “on track to restore volume growth while protecting margins and cash flow for the year”.

The U.S. food giant Kraft Foods (KFT) has made a £10.2bn bid ($16.7 billion) to acquire Cadbury (CBY), the most famous confectionery company of U.K. The deal values Cadbury share at 745 pence a share. (Note:1 British Pound (£)= 100 pence)

Cadbury’s board quickly rejected the offer saying that saying that the deal undervalues the company. Some of the large shareholders including Legal and General, one of U.K.’s top investment and insurance services company, are backing the board. Shareholders want at least 800 pence a share. Now other companies such as Nestle and Hershey may join the battle for the control of Cadbury. If Kraft is successful with this takeover bid, the global food industry will be changed for ever. So what are the largest food and beverage companies in the world?

The market has been defying gravity this summer, with the S&P500 up 49% since March. But most of the appreciation has been in what I consider lower quality stocks. Many homebuilders with doubtful prospects have doubled from their recent lows, while stocks that are somewhat recession proof like McDonalds (MCD), Walmart (WMT), Coca-Cola (KO) and Procter & Gamble (PG) have bounced a mere 15-20%.

According to Bloomberg, “companies with the worst earnings led the 45 percent gain in the Standard & Poor’s 500 Index since it fell to a 12-year low five months ago”. It might be a good time to sell some of your winners that have done exceptionally well and either wait for a pull-back, or, if you’re trigger happy, buy solid investment-grade companies.

For FY09 and Q409 (note that Procter & Gamble’s (PG) fiscal year ends in June), organic unit volume fell 2% and 4% respectively, while organic sales rose 2% for FY09 and fell 1% for the quarter. With the impact of currency, sales fell more, but the dollar can’t continue to rise forever. Despite the slight drop in revenue from Q408 to Q409, they still managed to grow diluted EPS from continuing operations and adjusted for non-recurring items by 6% (including non-recurring times, EPS fell 11%). Although the market seemed to be disappointed with Procter & Gamble's Q4 earnings, I am still bullish on the company, believing it to have better than average long-term prospects.

First of all, I would hardly call their performance poor, considering we are in the middle of the worst recession since the 1930’s. P&G’s results appear to be stellar compared to that of the S&P500 – looking at S&P’s latest spreadsheet (with 88% of companies having reported), 77.3% of companies are reported lower sales this quarter as compared to the same quarter in 2008. Overall, weighted sales of the SP500 are 20% less than in the previous quarter, and operating earnings per share is 19% lower.

1. Is this a great business run by great managers?

I bought Unilever last week at $25.00. Unilever has dual listing, one in London and the other in the Netherlands; both are traded as ADS on the NYSE under the tickers UN and UL. Both should be identical, but UL, in which I bought a small position, is about 4% cheaper than UN.

Q. How much should I be thinking about Unilever?

This is the latest edition in a new series of posts we're doing here at Market Folly entitled, 'hedge fund news summaries.' And, as as the title obviously states, the goal is to give you the quick hits of everything that is happening in hedge fund land. So far, reader response has been very positive and we thank you for the feedback. As such, we will continue posting them since many have found them useful. You can check out our most recent hedge fund news summary to catch up to speed as well.

Seth Klarman (Baupost Group) - The value master himself has recently been "up to no good." And, by that, we simply mean he has been active making investments. Intriguingly enough, Klarman's latest target has been CIT Group (CIT). Before you avid Klarman-ites become appalled and outraged at this move, settle down... this is a pretty good deal for him. (Obviously, right? Why else would he do it?) Klarman's hedge fund Baupost Group was part of the assembly of funds that provided financing for CIT. Baupost joined Centerbridge Partners, Oaktree Capital Management, Pacific Investment Management, and Silver Point Capital, among others. The reason this deal was so enticing to Klarman and others is that the deal was heavily over-collateralized. Supposedly, the loan is backed by $30 billion worth of assets. Additionally, Klarman and the others will be receiving an enticing interest rate of Libor + 10 points with a 3% floor. Later, it was also revealed that this group of lenders also received an upfront 5% fee. So, what's not to love about that deal? CIT was desperate for help, and they got it. We ponder if this is another situation where a prominent investor gives his 'stamp of approval' to a company in return for a great return on capital. While we think this specific situation is more-so due to CIT's dire situation, we're sure they don't mind being associated with Klarman & Baupost. In other recent Baupost news, we saw that they sold completely out of their Omnova (OMN) position. You can check out the rest of Baupost's portfolio here.

One hundred and sixty million people a day use products manufactured by Unilever (UL). The firm has 400 brands of which 13 are “Billion Euro brands” including Dove, Knorr, Flora, Lipton and Sunsilk.

In a recession when consumers have less cash to spend there is naturally an inclination for shoppers to fill their baskets with supermarket own-label products rather than branded goods which are usually more expensive. Investors in Unilever shares therefore anticipated the Q1 2009 update with caution; in the knowledge that the firm is currently facing extreme pressures on both margins and revenue.

160 million people a day use products manufactured by Unilever (UL). The firm has 400 brands of which 13 are “Billion Euro brands”, including Dove, Knorr, Flora, Lipton and Sunsilk. In a recession when consumers have less cash to spend, there is naturally an inclination for shoppers to fill their baskets with supermarket own-label products rather than branded goods which are usually more expensive. Investors in Unilever shares therefore awaited the Q1 2009 update, in the knowledge that the firm is currently facing extreme pressures on both margins and revenue.

The firm has held up relatively well under the circumstances. Q1 organic growth was 4.8% with double-digit progress in emerging markets off-setting weakness in Western Europe. Earnings per share, though, after restructuring, disposals and pension costs were down 13% (EPS 44% weaker including exceptional items). News that turnover was 0.7% lower in the quarter relative to the same period a year earlier also required deeper investigation. The near flat performance was aided by the organic growth, detailed above, but held back by currency movements and weaker volumes.

Disclosure: No positions

Following on my recent post that revealed the rise in American consumption predicated in large part on ever-rising healthcare costs, I decided to question my own view that US consumers would drastically retrench. Contrarian thinking is key to making good investment decisions -- we should apply it to our own views once in a while.

My latest screen, conducted via the Morningstar website, focused on companies in the consumer goods sector. Specifically I used the following criteria:

This is part 4 of a 4 part series looking at each of the companies selected and listed by Fortune in their 2009 Fortune 40: The Best Stocks to Retire On list.

Part 1 | Part 2 | Part 3 | Part 4

In a previous article, I provided a list with the best dividend stocks for the long run. Since the list included only US stocks several readers asked for a similar list with international dividend growth stocks instead. Furthermore, I am also looking to expand my portfolio to include at least some allocation to global dividend companies.

I do agree that in the globalized society of the 21st century it is important do be able to diversify your stock investments away from the US. By purchasing international stocks one essentially receives income in a different currency, which is a decent hedge against a possible devaluation of the US dollar. Another benefit of shopping for quality dividend stocks abroad is the huge potential for economic growth and development that both established and emerging economies posses.

BP (BP)

Cramer is surprised that British oil giant BP hasn't made more than a $1.50 move after its CEO indicated the 7% dividend was safe as long as oil stayed at $50. With oil now at $60, Cramer is waiting for the stock to make a bigger move; "It is the cheapest oil stock I follow."

This is part 4 (final part) of the Fortune 40 Best Stocks to Retire on (Part 1 | Part 2 | Part 3).

We previously looked at the first 30 companies that made up the list in Fortune’s 40 best stocks to retire on. Here we look at the final 10.

Disclosure: No positions