03-14-2016, 12:20 PM
(03-11-2016, 06:30 PM)Dividend Watcher Wrote:(03-10-2016, 07:49 PM)kayboy Wrote: http://seekingalpha.com/news/3166410-gen...tal-target
Rumors abound.
I have no interest in 3G or anyone else making a bid for the General. I like a lot of their products, they're making a lot of changes in their product mix to appeal to the "health nuts", and they've paid a dividend for over a hundred years and never reduced it. It's a reliable slow grower that just keeps plodding along and sends me money every quarter.
I don't need a wad of extra cash right now from a buyout bid. Where would I invest it? If you think GIS's P/E is high right now, look at the valuation and yield of the quality replacements right now; e.g., CL, HRL, MKC, SJM, CHD. Unilever & Nestle would be good replacements also but then you have to deal with currency fluctuations and, with Nestle, taxes whether in a tax sheltered account or not (AFAIK).
Looks like I got in around the same price range as you, kayboy, but my expectations when I opened a position in GIS was to grow old with it and pay the grocery bills. It's one of my few core companies that I wouldn't consider trading bar some catastrophe.
3G's done a nice job with Heinz and Kraft but both companies had gotten stodgy and couldn't change enough to get out of their own way. Kraft's CEO talked a good talk before the merger but couldn't seem to implement a lot of what he talked about. GIS, on the other hand, has actually made progress in changing the company's product line in reaction to the marketplace. I owned HNZ a long time ago and got out when I could see the results of their stagnation. Had KRFT in wife's portfolio and was becoming a little disillusioned when management couldn't seem to implement what they were touting at investor conferences so the merger and subsequent shakeup seems to be working with KHC. I suppose 3G could gut it internally with it's slash & burn mindset for a quick bounce in profits but I think that would throw them into disarray internally versus the planned transition they're executing on now.
I guess we'll see.
Interesting discussion, maybe not in the correct thread. I'm actually not a big fan of 3G. My impression of them is that they load up on too much debt to make things happen and just cut headcount to improve margins. It works for the first few years but ultimately hurts the company.