Channon

Kraft Foods: Time to Put This Cash Cow Out to Pasture?

With the stock off 15% since you published this piece, is it any more attractive? Surely the debt concern is there, but at some point, the stock would be attractive enough to offset that concern, right?

Beware the 'Wal-Mart Effect'

Without commenting on your conclusions, I do believe you have a logical flaw:

"To continue at this pace, AIPC would need to rapidly expand its operations…meaning higher fixed costs and a higher threshold for probability."

Without knowledge of where the company is running relative to capacity, this is not a logical conclusion. Are they running their "high fixed cost" equipment at capacity? On how many production shifts? Can they add a weekend shift? A second weekday shift? How about an overnight shift? If they are currently only running this equipment 40 hours per week, there is a phenomenal amount of capacity left before they will be faced with higher fixed costs or a higher threshold for profitability.

Your argument is that AIPC is not favorably scalable; unfortunately, that information is not contained in the company snapshot at Yahoo Finance.