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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (73865)	10/5/2023 1:21:55 PM
From: Spekulatius	1 Recommendation Recommended By E_K_S Respond to of 78666

KLG's revenues are know - about $1.4B / 6month so i would guess about $2.8B annually. They should make ~$1/ share in earning, but I am not sure they have accounted for standalone costs here. In a lot of spinoffs, I found that they do not. Debt is $484M which is significant. This is quote low gross margin business (~25%). My concern is that it looks like they have taken pricing last year and that may backfire considering that the category of breakfast cereals is challenged and there are white label and store brand competitor offering significantly lower prices for what seems to me a pretty undifferentiated product. If they can improve pricing and milk the cash flows without volumes falling apart, it could work out. the low gross margins create a lot of operating leverage. sec.gov (No position)