Mondelez International - Kraft

[investingsgx]

[Image: mondelez_logo.gif]

Have you guys noticed this stock lately? Kraft Food splitted itself into two business. One is the Kraft's Group itself which manages Northern American groceries operations and Mondelez International, the one that manages global operations.

With the split, they can allocate more resources and concentrate on their global operations.

Any opinions on the current price?

[snowcap]

I bought Kraft about 2 years ago when I was looking for a solid blue chip dividend stock. Basically they have a big moat, and customers make repeated purchases. They are a global food giant. They gave me about 3% every year.

Unfortunately, this is one of my "buy hold and forget" stories. I focus more on SGX than the US market, so I thought I could just let the Kraft dividends compound and check on it 20 years later. Ha ha ha!. Anyway recently I checked and hey I found that it split! So now I own some KFT and some Mondelez. I haven't reviewed the numbers for due diligence because I'm lazy. So sorry not much help.

What I can share is that I do not intend to add to my position, not because it is a bad investment, but because of the uncertain forex risk. In fact, with QE3, the USD may fall further against the SGD. So I'm sitting tight. Of course one option (if and when I do the due diligence) is to buy KFT, but hedge with a long SGD-short USD position or something like that. That comes with a certain cost. Pls do your own due diligence.

[investingsgx]

I bought Kraft about 2 years ago when I was looking for a solid blue chip dividend stock. Basically they have a big moat, and customers make repeated purchases. They are a global food giant. They gave me about 3% every year.

Unfortunately, this is one of my "buy hold and forget" stories. I focus more on SGX than the US market, so I thought I could just let the Kraft dividends compound and check on it 20 years later. Ha ha ha!. Anyway recently I checked and hey I found that it split! So now I own some KFT and some Mondelez. I haven't reviewed the numbers for due diligence because I'm lazy. So sorry not much help.

What I can share is that I do not intend to add to my position, not because it is a bad investment, but because of the uncertain forex risk. In fact, with QE3, the USD may fall further against the SGD. So I'm sitting tight. Of course one option (if and when I do the due diligence) is to buy KFT, but hedge with a long SGD-short USD position or something like that. That comes with a certain cost. Pls do your own due diligence.

thanks for the advice. I sold it because i'm on margins due to the lack of funds to purchase 100 shares of mondelez.

There are still upside potential to the US stock market with effect from the QE3 and i think the real estate and banking sectors could potentially grow at a faster rate with banks slowly recovering their debts since the US financial crisis in 2009

[weijian]

Thought this is pretty interesting. 3G is renowned for improving Burger King (even I have to admit the BK stores here are much more efficient and have a feel of the ruthless efficiency of McDonald - i have visited the BK stores for food much more frequent since 3G took over). The same trick doesn't seem to work on some other companies or all the time.

Alternatively, Kraft could simply be at the start of a long term secular decline in the value of their brand equity...

Kraft Heinz Couldn’t Stomach 3G’s Relentless Cost-Cutting

3G Capital, the private equity firm co-founded by Brazilian billionaire Jorge Paulo Lemann, shook up the food industry with its ruthless focus on efficiency. After taking over H.J. Heinz in 2013, with financing help from Warren Buffett’s Berkshire Hathaway Inc. conglomerate, the New York-based investment shop fired thousands of workers and shuttered factories, creating industry-leading profit margins in less than two years.

https://www.bloomberg.com/news/articles/...st-cutting

[Behappyalways]

The Rise and Fall of Kraft Heinz
https://www.youtube.com/watch?v=uou_GmcXFG4