Mike,
What do you think of the food group?
The entire group is getting hammered relentlessly. My view is that the group basically has flat unit sales growth and has been growing via acquisition for a long time. Most of them appear very leveraged. So perhaps rising interest rates are hurting margins for the debt revolvers and making acquisitions a bit more difficult.
However, some of the prices are getting interesting. Most of them have huge stable free cash flow that can be used to rapidly pay down debt and/or buy back shares. Amortization is also high so "cash earnings" (if you go for that sort of thing) are higher by 10%-15% for a number of them.
The list of "getting close to attractive" is very long. Sara Lee, International Home Foods, Interstate Bakeries, Heinz, Smuckers, Campbells, and others own brands that very attractive. Sara Lee also has Coach, Hanes, Leggs, Platex and other consumer brands. If they can't grow units much they might be put into play sooner or later.
Any thoughts?
Wayne |
