February 17, 2017 – Mondelez International, Inc. (MDLZ) – January 2018 $35.00 (MDLZ180119C00035000) paying $7.20 or better.
It’s time to reach for the jar on the top shelf with a tall glass of milk as this morning I am going with Mondelez International, Inc. (MDLZ), makers of the ever-popular Oreo and many other recognizable mega-brands. Although the company name may not strike the same cord as when it was Kraft, the brands taken with MDLZ with the spin off are still very familiar.
MDLZ, through its subsidiaries, manufactures and markets cookies, crackers, and salted snacks; chocolates, gums, and candies; powdered beverages and coffee; and other grocery products. Its primary brand portfolio includes Oreo, Nabisco, Cadbury, Trident, Jacobs, and Tang. The company was formerly known as Kraft Foods Inc. and changed its name to Mondelez International, Inc. in October 2012. The company was founded in 2000 and is headquartered in Deerfield, Illinois.
According to the MDLZ website, they are the world’s pre-eminent maker of snacks, with leading market shares in every category in which they compete, holding the No. 1 position globally in Biscuits (cookies), Chocolate, Candy and Powdered Beverages as well as the No. 2 position in Gum and Coffee. About three-quarters of their annual revenue is generated in the fast-growing Biscuits, Chocolate and Gum & Candy categories, and nearly 40 percent of their sales come from high-growth emerging markets.
Right now the numbers for MDLZ are: Forward P/E ratio of 18.12, Return on Equity of 6.26% (slightly up from last quarter), Revenue of over $25.92 billion, total cash on the balance sheet of $1.74 billion, debt of $17.2 billion, which is quite hefty. The stock closed yesterday at $43.20, which is off the 52-week high by about only four points, much of which dropped in the last couple of days. We don’t want to try to catch a falling knife, so I’ve put in a low recommendation, so we’ll only get on base if the stock drops a bit more.
Please see the scorecard page for trading details and if the order is filled, the GTC (good ’til cancelled) order should be set immediately at $1 above the purchase price.
Remember: Life’s a Journey; enjoy the ride.
Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.
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