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Strategies & Market Trends : Value Investing
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To: bruwin who wrote (62004)5/16/2019 9:20:03 AM
From: E_K_S  Read Replies (1) of 78665
 
stay tuned . .many of those overhead costs are shared so at the margin more of the revenues go to the bottom line. That is how a business grows and a company's product portfolio is upgraded.

The most important piece of updating a legacy product portfolio is to add new products at a fair cost. At 1x sales, they got that done. Now lets see if Clabber baking products complement their spice division and/or expand their customer base and revenues grow. The Clabber products also have many non-GMO items which is part of the new healthy move especially in baked goods.

Remember, at any point in this transition, there are road bumps and unexpected costs. However, in 18-24 months, I expect steady revenues and maybe will see PE expansion.

Look at NWL another company I have been buying based on their product portfolio update/transition. They are having a much more difficult time but I am still positive they will come out the otherside w/ some great new products along w/ an updated logistic/online order fullfillment system. Management is making some large investments now (impacts EPS) but should increase margins/profits in the longer term. FWIW, I see NWL as going through a much more difficult product portfolio update/transition than BGS. You do not have to buy NWL consumer products as one does w/ food.

These are value opportunities (my opinion) and as such are undervalued. I expect 18-24 months for a turnaround if not longer.

Good investing

EKS
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