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-8.97%
-4.37%
-0.07%
+1.66%
+5.77%
Most Trending
-8.97%
-4.37%
-0.07%
+1.66%
+5.77%
Kellogg is one of the largest and most respected food companies in the world. Its leading product is of course its cornflakes. The name Kellogg has become synonymous with breakfast cereals in recent decades.
The same product that the founders of the company themselves invented and made it an essential ingredient in the breakfast of millions of consumers all over the world. So why did the company decide to split? The company itself stated that the purpose of the move is to increase the value of the company to its shareholders.
Currently the Kellogg's shareholders are not happy; the stock price of the company lags the S&P 500 by a wide margin.
Because although the cornflakes is an important and central product for the company, it is not a growth engine.
In fact, the company itself, in the reports it published for Q2 of 2022 showed that while the annual growth of its cornflakes division is negative, the growth of the snacks division is much higher. Yes, while the company's cornflakes division showed negative growth of 2% in 2021, the company's snacks division grew by 7%.
Therefore, the company believes that the split will allow investors to value each company individually when they are independent companies.
Just as the company's CEO Steve Cahillane says: "These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth."
This is of course not just a technical split, but of course, much more than that, maybe the split will force, for example, the breakfast cereal company, to invest much more in innovation, in the development of new products, in a real attempt to generate growth. The split should take effect in the coming year, after which we will see if the company's extraordinary move will really bring additional value to the shareholders.
Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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