Summary MKC is a dominant provider of spice and seasoning products to the commercial and industrial markets. It leveraged its balance sheet to acquire Reckitt Benckiser’s Food Division (‘RBFD’) for ~$4.21B in 2017 but management is committed to a significant reduction in debt levels by the end of fiscal 2020. Growth in revenue and margins [...]
Summary MCO is one of 10 statistical rating organizations recognized by the US Securities and Exchange Commission. It is the 2nd largest publicly traded member of this small group behind S&P Global Inc.. The company’s reputation took a hit when it completely failed to warn investors of the risks which led to the Financial Crisis. [...]
Summary On February 22, 2018 HRL released its Q1 2018 results and increased FY2018 EPS guidance. Q1 2018 reported revenue growth in the Grocery Products: $613.87M (+1%), Refrigerated Foods: $1.18B (+5%), International & Other: $150.32M (+19%) segments but Commodity turkey breast markets remain at multi-year lows thus resulting in weak results at Jennie-O Turkey Store: $390.65M [...]
Summary GPC reported strong FY2017 results on February 20, 2018 but the stock price pulled back ~5.2% as the stock was overvalued. The EIS and Motion businesses have been combined into one $6B industrial group as of the beginning of 2018. The rationale for combining these two segments is to provide economies of scale and [...]
Summary WMT reported FY2018 results February 20, 2018 and its stock price dropped ~10%; results were solid but investors had bid up WMT’s stock price to an unreasonable valuation. It continues to generate strong FCF and management is deploying its resources so that WMT can adapt to the evolving retail landscape. WMT announced a ~2% [...]
Summary Coca-Cola is facing declining sales and FCF due to changing consumer preferences. A turnaround plan has been implemented but I suspect positive results will take time to be evidenced. The Tax Cuts and Jobs Act (TCJ) will positively impact KO but there will be no positive net cash impact for several years. The days [...]
Summary BAM has generated a compound annual total return of ~17% (dividends reinvested) since 1997 versus ~7% for the S&P 500. Management is cognizant of short-term performance but the business is managed for the long term with a goal to generate 12% - 15% compound returns over the longer term. BAM partners with institutional investors [...]
Summary PEP released its Q4 and FY2017 results on February 13, 2018. Organic revenue, which excludes the impact of various items, grew 2.3% versus 3.7% in FY2016, and 5% in FY2015. FY2017 Adjusted EPS amounted to $5.23 versus $4.85 in FY2016. PEP’s adjusted EPS includes a one-time $1.70/share benefit from a provisional net tax expense [...]
Summary Broadridge released its Q2 and 1st half of FY2018 results February 8, 2018. Projections have been revised upwards for the remainder of 2018. Changes in the US Tax Law have resulted in BR revising its FY2017 – 2020 Growth Objectives in Adjusted EPS from the 9% - 13% range to the 14% - 18% [...]
Summary This Church & Dwight analysis is based on Q4 and Fy2017 results released February 5th, 2018. CHD outperforms all members of its peer group from a free cash flow conversion process. In FY2016, 82% of CHD’s sales were in the US. CHD is now making a concerted effort to expand its international sales. CHD [...]
