More From Diana Key
Assessing Mead Johnson’s Market Valuation in 2016
As of January 12, Mead Johnson was trading at a higher multiple than Abbott Laboratories, XLP, and SPY but lower than Nestlé and Kraft Heinz.
It Was a Festive Holiday Season for Signet Jewelers
On January 7, 2016, Signet Jewelers (SIG), the world’s largest retailer of diamond jewelry, announced its broad-based success in the holiday season with revenue of $1.9 billion.
Will Manitowoc’s spin-off create value for shareholders?
According to Deutsche Bank, Manitowoc’s share could be worth between $23 and $28 if it separates its businesses.
How does Manitowoc view the split?
MTW expects its two newly formed companies to be consistent in capital structure and credit rating with that of Manitowoc.
ValueAct Capital Ups Its Stake in Allison Transmission Holding
Allison Transmission Holding and its subsidiaries design and manufacture commercial and defense fully automatic transmissions.
AQR Capital increases stake in Intel
Intel generated ~$5.7 billion in cash from operations. The company paid quarterly dividends of $1.1 billion and repurchased 122 million shares for $4.2 billion.
Farallon Capital sells stake in Yahoo!
Farallon Capital Management sold its position in Yahoo! Inc. (YHOO) during the third quarter. The stock accounted for 3.39% of the fund’s total 2Q14 portfolio.
Why Sandell wants to revamp Brookdale’s board
Sandell wants Brookdale to revamp its board because It has no director with real estate experience and lacks in independent shareholder representation.
Eminence Capital Reduces Position in Humana
During the fourth quarter of 2014, Eminence Capital lowered its stake in Humana (HUM). The company accounted for 1.33% of the fund’s 4Q14 portfolio.
Highfields Capital exits its position in Broadcom
Highfields Capital sold its position in BRCM in the third quarter. The position accounted for 1.66% of the fund’s 2Q14 portfolio. Broadcom makes semiconductors for wired and wireless communications.
Mead Johnson’s Path forward in China—amid Challenges
Because price discounting is common in China, Mead Johnson has so far not witnessed an increase in the consumption of its infant formula products there.
JAB Aims to Rule the Global Coffee Market
JAB is trying to build a powerhouse in the global coffee market to compete with the world’s leading coffee company, Nestle (NSRGY).
Citadel Advisors Starts a New Position in Altera Corporation
During 4Q14, Citadel Advisors started a new position in Altera Corporation (ALTR).
Analyzing Hershey’s Emphasis on Product Innovation
Hershey plans to position dark chocolate as a lifestyle choice in the US. It has thus begun promoting its dark chocolate brands for specific consumption.
Mead Johnson Plans to Focus on R&D to Support Innovations
Mead Johnson follows a strategy of investments in innovation, having expanded its liquids portfolio and rolled out its key specialty formulas across Asia.
B/E Aerospace spun off KLX business on activist push
On December 17, 2014, B/E Aerospace completed its spin-off of KLX, Inc., from B/E Aerospace, and KLX started trading on NASDAQ under the ticker symbol KLXI.
Weighing Kraft Heinz’s Strengths and Opportunities
Kraft Heinz has a wide network of processing facilities and distribution centers, which allow it to supply fresh and high-quality products to customers.
Evaluating Kraft Heinz’s Core Business Strategies
Kraft Heinz is focusing on core business practices, including ZBB (zero-based budgeting), revenue management, and MBO (management by objectives).
An Overview of Hershey, America’s Largest Chocolatier
Hershey is the largest producer of chocolate in North America. It is a global leader in chocolate, sugar confectionery, and chocolate-related products.
Running down Mead Johnson’s Product Categories and Offerings
Mead Johnson’s product portfolio addresses a broad range of nutritional needs for infants, children, and expecting and nursing mothers.
State of the Jewelry Industry in 2015: Growth and Challenges
Trends shaping the jewelry industry include Increasing demand for branded jewelry and an increased focus on e-commerce sales.
Hershey’s Steps to Improve Suppliers Productivity and Conscious Sourcing
Hershey has set a goal of sourcing 100% cocoa from certified cocoa farms. In fiscal 2014, it sourced 30% certified cocoa.
Infant Nutrition May Be the Fastest-Growing Packaged Food Market
Zenith International estimates that infant nutrition will be the fastest-growing packaged foods market in five years, with an annual growth rate of 7%.
Eminence Capital raises its position in Xoom
Increased mobile adoption of Xoom’s mobile products led Latin America revenue, which rose 48% YoY. Gross sending volume increased 29% YoY.
AQR Capital initiated position in Bally Technologies Inc.
AQR Capital initiated a position in Bally Technologies during the third quarter of 2014 that accounts for 0.22% of the fund’s 3Q14 portfolio.
Key Takeaways from ValueAct Capital’s 4Q14 Holdings
ValueAct opts for long-term positions in companies that it believes are undervalued. With its significant stake, the fund works with the company to improve shareholder returns.
TPG-Axon raises position in GNC Holdings
In 3Q14, same-store sales—as measured on a product-only basis—decreased 6.9% in domestic company-owned stores, including GNC.com.
How Manitowoc’s 3Q results reflect “muted demand environment”
Manitowoc has a global footprint with presence in all major geographies and serves diversified end markets.
Glenview Capital lowers position in Crown Castle International
In 4Q14, Glenview Capital lowered its position in Crown Castle (CCI). CCI accounts for 0.34% of the fund’s total 4Q14 portfolio, down from 3.40% in 3Q14.
Highlights of Eminence Capital’s 4Q14 Positions
This article provides an overview of the notable positions that Eminence Capital traded during the fourth quarter of 2014.
Micron Technology’s Lower Position in Point72 Asset Management
Point72 reduced its position in Micron Technology. It sold 4,792,200 shares during 4Q14. The shares accounted for 0.28% of the fund’s total 4Q14 portfolio.
JAB to Challenge Nestle, Global Leader of Portioned Coffee Market
JAB’s share in the global coffee market is estimated to reach approximately 20% with the addition of Keurig’s brands and products to its portfolio.
Sizing up Kraft Heinz’s SKU Rationalization Technique to Manage Inventory
Heinz has been using an inventory management technique, SKU rationalization to focus on profitable growth, which helps improve sales and profitability.
Tiffany’s Competitive Position: Porter’s Five Forces Analysis
Porter’s Five Forces model suggests that there are five forces that determine the attractiveness and long-term profitability of an industry or a sector.
Assessing Hershey’s High Market Valuation Relative to the S&P 500
As of October 16, 2015, Hershey was trading at a PE multiple of 21.5x forward earnings, and its competitor Mondelez was trading at 23.6x forward earnings.
Keurig Eyes Opportunity to Expand into Europe with JAB Deal
After the deal is complete, Keurig may extend its business into Europe. JAB may distribute its premium brands and products in the US market.
Analyzing Tiffany’s Largest Segment: The Americas
Tiffany & Co.’s Americas segment includes sales from company-operated retail stores in the United States, Canada, Mexico, and Brazil.
Assessing Hershey’s Customer Relationships and Initiatives
Hershey is planning to stop using GMO sugar, milk from cows treated with growth hormones, artificial colors and flavors, and high fructose corn syrup.
Point72 Reduces Its Stake in Valeant Pharmaceuticals
Point72 reduced its stake in Valeant Pharmaceuticals by selling 924,400 shares. It held 132,300 Valeant shares. Valeant accounted for 0.13% of the fund’s 4Q14 portfolio.
ValueAct Capital discloses activist stake in Baker Hughes
Activist hedge fund ValueAct Capital declared a 5.1% stake in Baker Hughes in its 13D filing on January 15, 2015.
ValueAct Capital Lowers Its Stake in CBRE Group
CBRE Group reported 4Q14 revenue of $2.8 billion, an increase of 25% on a year-over-year (or YoY) basis.
Citadel Advisors Raises Position in United Technologies Corporation
United Technologies Corporation (UTC) provides high technology products and services to the building systems and aerospace industries worldwide.
Hurdles in Tiffany’s Growth: Weaknesses and Threats
Since it’s a luxury brand, Tiffany & Co.’s products are priced high, with no promotions. Thus, Tiffany products may be out of reach for many customers.
What Every Investor Needs to Know about Kraft Heinz: A Series Overview
The Kraft Heinz Company is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world.
Why China Is Such an Important Market for Hershey in 2015
Hershey is the fastest-growing confectionery company in China, and Hershey expects China to become its second-largest market behind the US by 2017.
Highfields Capital Management’s positions in 3Q14
Highfields Capital Management LP is based in Boston. The fund was founded by Jonathon Jacobson in 1998. The fund’s US long portfolio declined slightly to $12.8 billion in the third quarter.
Manitowoc to spin off after activist pressure
In its 8K filing with the SEC on January 29, Manitowoc announced that it will split its cranes and foodservice businesses.
Analyzing Eminence Capital’s 13G filings
In 3Q14, Eminence Capital’s portfolio increased slightly to $6.83 billion, compared to $6.05 billion in the second quarter.
Why Tiffany & Co. Is More Profitable than Its Competitors
Since 2006, Tiffany’s margins have been on the higher side compared to its peers, including Signet Jewelers and Fossil, in the retail jewelry industry.
Analyzing Mead Johnson’s Stock Performance in 2015
As of January 6, Mead Johnson had a market cap of $15.4 billion. In 2015, MJN’s stock price dropped by 26.6% to $78.95.
Why Tiffany Is Spending More on Marketing
Tiffany has been increasing its advertising expenses. In fiscal 2015, it spent $284 million on advertising, marketing, and public and media relations.
Signet Jeweler’s Market Positioning in the Retail Jewelry Industry
Total retail jewelry sales in the US grew at a CAGR of 4.4%, reaching $74.7 billion in 2014. Fine jewelry sales grew at a CAGR of 5%, reaching ~$69 billion.
Assessing Kraft Heinz’s Market Valuation
As of December 24, 2015, Kraft Heinz was trading at a forward PE multiple of 27.4x, whereas General Mills was trading at 19.8x forward earnings.
Eminence Capital lowers stake in VCA Antech, Inc.
Eminence Capital lowered its position in VCA (WOOF) during 3Q14. The stock accounts for 1.95% of the total portfolio—down from 3.01% of the fund’s 2Q14 portfolio.
Point72 Asset Management begins position in Jones Energy
Jones Energy is an independent oil and gas company engaged in the exploration, development, production, and acquisition of oil and natural gas properties.
Mead Johnson’s Capacity Expansion Initiatives Aim to Support Global Growth
At the end of fiscal 2014, Mead Johnson had nine in-house manufacturing plants around the world, with supply in more than 50 countries.
Why Tiffany Faces Slower Growth in 2015
Tiffany is experiencing the negative effects of the strong US dollar. The dollar’s continued strengthening may lead to slower growth for the jewelry market.
Why JANA Partners Considers CSC To Be Undervalued
JANA Partners declared its increased stake in CSC, believing that the company is undervalued. JANA wants CSC to look for strategic alternatives.
Horseman Capital reduces its position in Newmont Mining
Newmont Mining is one of the world’s largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500.
A must-know overview of Baker Hughes
Baker Hughes is a leading supplier of oilfield services, products, technology, and systems to the worldwide oil and natural gas industry.
Pandora Media Is a New Position for Eminence Capital
Eminence Capital initiated a position in Pandora Media (P) during the fourth quarter. Pandora shares accounted for 2.22% of the fund’s 4Q14 portfolio.
Signet Jewelers’ Core Strength: Exclusive Merchandise Offerings
Signet Jewelers has taken on several merchandise initiatives in 2015. It expects its “Ever Us” offering to become a new trend in the jewelry industry.
Hershey’s Capital Allocations for Capacity Expansion and Innovations
Hershey reported revenues of $7.4 billion in fiscal 2014, compared to Nestle’s revenue of 91.9 billion. But Hershey is mainly into confectionery.
TPG-Axon raises position with Monsanto
Monsanto received USDA recommendations for deregulation for both Roundup Ready Xtend soybeans and Bollgard II XtendFlex cotton.
Can Signet Jewelers’ Profitability Continue to Improve in 3Q16?
In the previous quarter, Signet reported an increase in profitability. In 2Q16, Signet reported gross and operating margins of 34.8% and 7.2%, respectively.
Appaloosa Management lowers stake in Google
Google provides Internet-related services and products. These include advertising technologies, search, cloud computing, and software.
JANA’s Track Record As an Activist Investor
Activist investor JANA Partners sold a 20% stake in the firm to Neuberger Berman’s Dyal Capital Partners. Dyal holds a passive interest in JANA Partners.
How does Baker Hughes stack up against its industry peers?
According to Barclays, BHI is “overweight” and it has set a price target of $65 for the company. KeyBanc gave Baker Hughes a “hold” rating.
Farallon Capital initiates position in Tim Hortons
Farallon Capital Management started a new position in Tim Hortons Inc. (THI) during the third quarter of 2014. The position accounted for 2.62% of the fund’s 3Q14 portfolio.
How KLX Inc. compares to its peers
KLX expects tax goodwill of $1.2 billion to provide cash tax savings of $254–$277 million for the next 15 years.
Hurdles for Mead Johnson’s Growth: Weaknesses and Threats
Mead Johnson invests very little in R&D—only 2.5% of its sales. By contrast, Nestlé and Abbott Laboratories spent 1.7% and 6.6%, respectively, on R&D.
Weighing Mead Johnson’s Strengths and Opportunities in 2016
Mead Johnson is known for its higher quality and responsible sourcing and has witnessed a high degree of brand loyalty and higher margins for its offerings.
How Mead Johnson Rewards Its Shareholders
Between fiscal 2010 and 2014, Mead Johnson returned $1.5 billion to its shareholders in the form of dividends and share repurchases.
Evaluating Mead Johnson’s Financials Compared with Competitors
At the end of fiscal 2014, Mead Johnson Nutrition had a total debt of $1.5 billion. Almost all of the company’s debt is a long-term debt.
Mead Johnson Plans to implement Zero-based Budgeting to Reduce Cost
Mead Johnson also plans to implement zero-based-budgeting for simplification and standardization.
Mead Johnson Has Big Opportunities for Growth in China
In November, China ended its one-child policy. Euromonitor expects baby formula sales there to increase from $19.9 billion now to $40.6 billion in 2020.
Assessing Signet Jewelers’ Market Valuation
As of January 8, 2016, Signet Jewelers was trading at the highest forward PE multiple compared to its peers, including Tiffany and Fossil Group.
Analyzing the Financials of Mead Johnson, a Heavy Hitter in Pediatric Nutrition
Mead Johnson Nutrition Company is a global leader in pediatric nutrition. The company has a portfolio of 70 products in more than 50 countries.
Signet Jewelers’ Ever Us Is Setting Trend for Jewelry Industry
Signet launched a new collection called Ever Us in October 2015. It’s meant to meet the need for jewelry that represents the bond between two people.
Hurdles in Kraft Heinz’s Growth: Weaknesses and Threats
Frequent recalls not only affect the consumer satisfaction and brand image of Kraft Heinz’s products but also increases the cost factor.
Kraft Heinz Implements Zero-Based Budgeting to Reduce Costs
3G Capital applied a ZBB approach, which starts from zero-base and analyzes every functional area for cost, to Heinz, after it acquired the firm in 2013.
Evaluating Kraft Heinz’s Financials against Its Biggest Competitors
Kraft Heinz had a coverage ratio of 0.87x at the end of 3Q15, whereas McCormick & Company and Mondelēz had coverage ratios of 10.2x and 56.1x, respectively.
Analyzing Kraft Heinz’s Great Brands Strategy
Kraft Heinz is shifting its focus on advertising spending from non-working media to working media.
Kraft Heinz Focuses on Higher Margins and Superior Returns
The two drivers of Kraft Heinz best-in-class margins have been its ZBB (zero-based budgeting) and its efficient manufacturing and distribution footprint.
Analyzing Kraft Heinz’s Objective of Profitable Sales Growth
Kraft Heinz plans to reinvest savings from cost initiatives into its brands and to refocus its strategic vision on innovation.
Why Kraft Heinz Plans to Invest More in Europe
Kraft Heinz’s Europe segment generated the company’s highest margins, with an adjusted EBITDA margin of 37.1% in 3Q15.
Kraft Heinz Aims to Become an International Heavy Hitter
Kraft Heinz could have the opportunity to improve its revenues by expanding into the untapped international market through the Heinz platform.
What’s on the Table with Kraft Heinz? Getting to Know the Company’s Product Offerings
Kraft Heinz operates more than 200 brands in nearly 200 countries. Its eight iconic brands contribute more than $1 billion in sales apiece to total revenue.
Breaking down Kraft Heinz: A Segmental and Geographical Overview
The US accounted for 67% of Kraft Heinz’s fiscal 2014 pro forma sales, with Canada and Europe each contributing 10% of total sales.
A Key Analysis of the Kraft-Heinz Merger
In early 2015, Berkshire Hathaway and 3G Capital designed the Kraft-Heinz merger by pairing the Kraft Foods Group with H. J. Heinz Company.
A Porter’s Five Forces Analysis of Kraft Heinz Company
Kraft Heinz faces competition from a huge number of players in the food market, but product differentiation is low between its competitors.
Packaged Foods at the End of 2015: What’s Trending in the Industry?
The global packaged foods market is expected to grow at a CAGR of 4.5% in 2015–2020, reaching ~$3 trillion. North America is the industry’s largest market.
Assessing Tiffany’s Market Valuation Relative to the S&P 500
Tiffany is trading at a higher multiple than its peers Signet and Fossil and at a higher valuation relative to SPY and the Dow Jones Industrial Average.
An Overview of Tiffany’s Capital Allocations
Tiffany’s capital expenditure was 5.8% of its sales in fiscal 2015. Signet Jewelers, Fossil, and Pandora had capex-to-sales ratios of 3.8%, 2.7%, and 2.4%.
Weighing Tiffany’s Strengths and Opportunities
In April 2015, Tiffany launched its vintage-inspired CT60 watch collection, considering the growth opportunities in the global luxury timepiece market.
Keurig Green Mountain’s Fiscal 2015 Results: Sales Fell 4%
Keurig saw a 23% decline in brewer sales, as sales volume fell by 12% and 16% in 4Q15 and fiscal 2015, respectively.
What Challenges Has Keurig Green Mountain Been Facing?
Keurig Green Mountain (GMCR) has been facing struggles in the coffee market (XLP), as Keurig’s patent for K-Cup pods, the single-serve coffee containers, expired in September 2012.
Weighing Tiffany’s Debt Burden and Leverage
Tiffany had total debt of $1.1 billion on its balance sheet in fiscal 2015, which for the company ended on January 31, 2015.
How Synergies from the Keurig-JAB Deal Will Benefit Both Players
With the completion of the Keurig-JAB deal, JAB will get an opportunity to control the North American single-serve coffee market and may introduce its premium brands in the US market.
JAB Holding Is Expanding Its Coffee Empire
JAB owns controlling stakes in Jacobs Douwe Egberts, Peet’s Coffee & Tea, Caribou Coffee, Einstein Noah Restaurant Group, Espresso House, and Baresso Coffee.