Why Kraft Should Stop Chasing Cadbury Bunny
Company is solid without it and should let it go.
Here's what I'm focusing on today:
Will it finally gobble up Cadbury (CBY)? I don't know, but it seems not a day passes that the saga isn't playing out in the press. Warren Buffett apparently isn't too keen on a share issuance in order to fund a combination.
Some other thoughts:
1. While nibbling on Cadbury could ultimately be a very good thing for Kraft and its stockholders, (particularly in the longer run), this drama is starting to become more than a tad distracting. Kraft should probably let up -- stop chasing this bunny and let the chips fall where they may.
2. I like Kraft for so many other reasons, including its existing products, its potential for future growth, and naturally, its dividend (which is what gets me most excited).
3. I see it reasonably trading into the $30s based upon the estimates for 2010.
For my last take on the company see What's Cooking at Kraft.
Seems like the Street is finally starting to pay some serious attention to it, which is good because it shouldn't be ignored. Goldman goosed its rating to a Buy.
My two cents:
1. I've been a fan for a while (click here for my last take on the company) and nothing's changed.
2. With its improving mojo, the mid $20s isn't out of the question within the next several months.
3. With all that said, I don't want to forget about Best Buy (BBY), which I still think is the best longer-term play on the future demand of electronics in this country. In my opinion, its selection, prices, and service stand head and shoulders above the rest.
Philip Morris International (PM)
Justin Sharon points out in his article today that Nomura lowered the company to Reduce.
1. Smoke 'em if you got 'em. This stock could still have some legs. Keep in mind that it's expected to show some solid growth from this year to next, and long term (despite all the New Year's resolutions), many will still be lighting up.
2. Estimates have been edging up recently.
Morgan Keegan lopped its rating to Market Perform.
I see the news and the sell-off here today as a bit of an opportunity. I'm still pretty excited about it and believe it's a $12 to $13 stock. For my last take, see Four Reasons Sonic Is Cooking.
Have a great day!
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