I had a good run with Kraft Foods(KFT) previously, then it split into its slow but high dividend paying grocery business (KRFT) and fast growing snack foods business, Mondelez (MDLZ). At that time I took profit and got out just before the split since i didnt actually have alot invested in it. The formation of Mondelez was a strategic one by Kraft Management. Since the split however, MDLZ has gone nowhere while KRFT is up 14.5%.
Recently though there have been some rumours floating around which might change things for Mondelez. They might be interested in acquiring Pepsi's snack businesses, including Frito-Lay, which will make MDLZ an even stronger food company. One has to take into account that same Irene Rosendfeld once ran Frito-Lay for Pepsi. Sale of Frito-Lay stakes to Mondelez would allow Pepsi to focus on their drinks business which i think is good. Look at Coca-Cola for instance, they ONLY do drinks, nothing else. It looks like a win-win situation for both companies and their shareholders too.
The future prospects for Mondelez was already looking strong before this because of the incredible potential for growth in Asia, Latin America and Africa. As with everything else, give it some time, all the money spent on marketing their products will eventually pay off. currently trading @ $29.88, In the medium-long term, I value MDLZ @ around $41-44 range with an upside potential of 37%.
Disclaimer: I currently hold long positions in MDLZ.
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