CAG has for some time an oversized number of #2/3/4 national brands in many of their categories--arguably leading in some regions but rarely the dominant national brands. Operating Margins have been well below industry averages due to this size disadvantage as well as excessive hard assets producing these products. If they are adding growing brands in growing categories, perhaps with the potential for expanding distribution of some of the acquired brands nationally then maybe there's some growth potential not seen by the market. I'd also be curious as to when the current resturcturing plan might tail off--it may have as I have not been extremely close to the story recently.
Altria: Why The FDA Can't Kill This Company [View article]
At the time of the KFT/Miller sales, it was believed that those businesses were being trapped by the lower valuation placed on tobacco stocks. Many institutional investors were also contractually unable or unwilling to invest in tobacco names which suggested without a sale, the sum of the parts discount would never be eliminated. I could only see MO diversifying if it could purchase another very low P/E entity otherwise you're back to square one.
Is Bombardier Flying Under The Radar Of Aerospace Investors? [View article]
Getting the C series in the air next year, demonstrating reliability and fuel efficiency could be a catalyst for orders (and the stock). It will probably never be an easy sell unless its an amazing aircraft or particulary suited for a multitude of city pairs. Recall the history of the Fokker F100 where orders dried up after airlines decided that training pilots and machinists on a unique aircraft (as opposed to being able to cross train on a family) was not worth the expense. Perhaps not an exact comparison with Bombardier but it's worth remembering.
Not that I don't think AVP could be a very interesting turnaround, but I'll bet the upcoming guidance will include a significant cut to earnings and cash flow expectations. Whoever the new CEO and other top managers are, they will want to establish is a fix to the current problems at the company and set the bar low enough to enable multiple years of dependable and consistent above-average growth. The question is--how deep are the problems (technology, geographies, second tier management, rethinking of rep commissions, how to get a faster turnaround on adding/removing successful/unsuccessful items from their catalogs, how to move to higher margin yet higher volume items while not alienating reps content to sell seasonal products, etc etc)? If run efficiently, AVP has been and can again be a highly profitable company with growth kickers of emerging markets. Not an easy fix and it is a company which needs the right people to motivate the huge number of sales reps.
EMC's Strong Quarter Justifies Its Growth Story [View article]
Feckless 191--agree that comparing the value of VMW on the EMC balance sheet to market value of the VMW stock is not useful. GAAP requires this--see Wiki "valuation-finance". I think the logic is that the cost value or the depreciated value of a piece of equipment, is more conservative and less likely for an agressive company to overstate an asset's value (and therefore the company's value) for assets which outsiders have a lower ability to immediately determine its true market value. If VMW stock were to decrease below the cost of the value carried on EMC's balance sheet, they would likely take a non-cash writedown charge.
EMC's Strong Quarter Justifies Its Growth Story [View article]
Without doublechecking your numbers, I don't think you should be comparing market capitalization to assets. EMC is probably carrying the value of the VMW shares at its cost, which would be appropriate unless the assets are likely to be sold in the near future. The authors math calculating the stub EMC valuation (assuming it's correct) is the more useful number in this company's case.
Movie Exhibitors Don't Need Harry Potter to Come to the Rescue [View article]
Cinemas used to make their money (beyond the high margin soda/candy which depends on traffic) from movies which had extended audiences (the revenue split with studios was heavy to the studio side in the first few weeks, much less so thereafter). Do sequels fit this scenario?
Lorillard to Benefit From Reduced Risk of a Menthol Ban: Smooth Yield, Smoking Return [View article]
But we don't know what the panel will come out with. Regardless of the scientific data and health/tax/enforcement risk of counterfeits/smuggling of menthol cigs, health panels and this one in particular are almost always anti-tobacco/anti-smok... So if the FDA wants to eliminate smoking and can use the rationale of saving minors (tough to publicly argue against this to the 75% of the public that does not smoke) from starting smoking by banning or even reducing the levels of menthol to points where the product is effectively not a "real" menthol product, this would not be good for LO. Also note their first major product launch in some time of the non-menthol Newport Red--are they planning for the future? There has also been talk from time to time over regulating the levels of nicotine, and reducing that would presumably ease the efforts of smokers to quit. Regulating menthol levels would not be a stretch. Finally the influential "advisors" to the FDA panel members have reportedly not been at all reasonable relative to their anti-smoking position vs scientific studies regarding the danger of menthol. Be careful before the panel concludes. Disclosure: No position of any tobacco names.
Dean Foods: Holy Cow, This Stock Is Undervalued [View article]
If the many smaller producers of milk are willing or able to survive on a cash flow breakeven basis, this will continue to pressure the competitors like in their respective geographic areas. DF shareholders want DF to earn a reasonable return on their capital but small, independent farms often do not in the short to medium term. Will they (continue to) go out of business? Eventually, but it is likely a very very slow process. I'm also not sure if DF can make sizeable acquisitions in their dominant areas in order to reduce competition or cut unnecessary overheads. Sounds a lot like the airline industry competing against bankrupt players a few years back who were more concerned with paying bills than earning attractive profits. My 2c.
ConAgra Gets No Respect [View article]
Altria: Why The FDA Can't Kill This Company [View article]
Is Bombardier Flying Under The Radar Of Aerospace Investors? [View article]
Why Turnaround Avon Will Outperform Estée Lauder [View article]
EMC's Strong Quarter Justifies Its Growth Story [View article]
EMC's Strong Quarter Justifies Its Growth Story [View article]
3 Tobacco Stocks To Add Steam To Your Portfolio [View article]
Movie Exhibitors Don't Need Harry Potter to Come to the Rescue [View article]
Lorillard to Benefit From Reduced Risk of a Menthol Ban: Smooth Yield, Smoking Return [View article]
Disclosure: No position of any tobacco names.
Dean Foods: Holy Cow, This Stock Is Undervalued [View article]