This hasn't exactly been a banner year for many food companies. While a few, most notably Danone
Such would seem to be at least partly the case for cereal and packaged foods company Kellogg
While Kellogg's domestic growth has been pretty respectable so far, it appears that management is making some investments to stimulate more growth down the road. Not only is the company investing pretty considerably in promotional spending, but it's also putting muscle into developing new products. Given the sea of seemingly identical cereals, crackers, and cookies on the store shelves, a new stand-out product could certainly be a boon -- particularly if it reduces the need to cut prices to take share from the likes of General Mills
Seeing as the stock is down about 5% of this writing while the overall market is pretty strong, it would seem that the Street didn't care for the sluggish operating performance and/or the fact that management guidance for '06 was a bit below the average estimate. Nevertheless, let's not lose sight of the fact that this is a company with well-known brands and a double-digit return on capital. What's more, it has continued to move forward with debt reduction and share buybacks.
There's no shortage of big food companies to invest in. In fact, you have to look only at Unilever
More Foolish food for thought:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). Nevertheless, he really wishes Kellogg would bring back the frosted green apple Pop Tarts that he remembers from his youth.