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They just finished a massively overpriced acquisition and are now loaded up on debt. Current price is fair - they're not overvalued, but they're not undervalued either.
I like Kraft in this space a bit better. I did a couple very quick flips on CPB this year, but ALOC is right. The company has leveraged up dangerously with no clear obvious reason why. Soup is no longer their biggest seller. Now is the time for companies to shed excess liability. New CEO is going to find everything is already tapped out.
Campbells Soup is a stale old company with stale old products and stagnant growth potential. They overpaid badly to acquire Synders Lance in a desperate attempt to branch out into the snack business - deworsifying, in the words of Peter Lynch. They've dropped 40% for a reason, and there's no reason to think it's going back to it's highs any time soon. Perhaps they will eventually get sold, Berkshire and/or 3G look like logical candidates, or perhaps another food company, maybe GIS? I don't know, but given the current situation, I would NOT consider them undervalued. I'd stay away, there's better places to put your money.
Take a look at UNFI in the food space. They just announced record quarterly earnings and are still reasonably valued. That's one that I'm watching closely.
Last edited by treasurekidd; 05-22-2018 at 06:42 PM..
I wouldn't touch Campbell's with Jobster's money!!!
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