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Kellogg’s Caught Pouring Bear Cheez in Its Grain Extruders!  (K)

Posted on November 18, 2021

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A Race to the Special K Finish

Today’s trade is built on the poison-peddlers from Battle Creek, Michigan – Kellogg’s Co. (NYSE:K).

Kellogg’s brands itself as the maker of ‘ready-to-eat cereal and convenience foods’.

But, of course, there’s more to it than that.

The company’s true aim is to appeal to the intellectual cravings, as it were, of the modern harried consumer.  Hence the sophisticated brand name selection.

To wit –

  • Incogmeato.
  • Cheez-It.
  • Froot Loops.
  • Veggitizers.
  • Bear Naked.
  • Pop-Tarts.
  • And Split Stix.

To name but a few.

So, you see, purchasing these items is not a mere passing adventure for your taste-buds.  It also makes a powerful statement about your wisdom, general health aptitude, and perhaps even your genetic endurance.

May the G-d of Heaven and Earth have mercy…

Anyway, the stock’s fundamentals are reasonable, mostly because the shares haven’t done anything in the face of history’s hottest bull market.

  • P/E is 17.28,
  • Dividend Yield is a robust 3.66%, but
  • Price to Book is unwieldy at 6.20, and
  • Debt to Equity stands at an unhealthy 2.16.
  • Earnings per Share are expected to rise a wholly unimpressive 0.65% next year, according to consensus estimates, while…
  • Just two weeks ago, Q/Q earnings fell by 18.50%.

So we’re not discussing a Tesla growth story here.

This is a laggard that no one expects much from at all.

Call it a ‘value’ stock if it makes you feel better, but the bottom line is this puppy’s going down.

The company is now also struggling with supply-chain issues, inflationary inputs and a strike at its cereal plants, with 1500 workers picketing and the company now upping the ante with a lawsuit against employees for allegedly blocking factory entrances to replacement workers.

Worst of all, cereal sales account for 40% of K’s sales.

Here’s the daily chart –

Hashem, Master of Legions, will have the final say.  May we ever find favor in His eyes.

Many happy returns!

Matt McAbby

 

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