{"id":53060,"date":"2014-06-20T06:11:10","date_gmt":"2014-06-20T10:11:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=53060"},"modified":"2014-06-20T07:04:10","modified_gmt":"2014-06-20T11:04:10","slug":"kellogg-stock-barely-flinches-after-lawsuit","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/kellogg-stock-barely-flinches-after-lawsuit\/","title":{"rendered":"Kellogg Stock Barely Flinches After Lawsuit"},"content":{"rendered":"
June 20, 2014<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Kellogg<\/p>\n

More and more consumers are beginning to wise up to marketing in the food industry \u2013 especially when it comes to the use of the word \u201cnatural.\u201d<\/p>\n

If you\u2019re unaware, the FDA still hasn\u2019t been able to nail down what a natural ingredient actually consists of.<\/p>\n

So for now, the FDA won\u2019t stop a company from slapping \u201cnatural\u201d on the product label as long as the food doesn\u2019t contain artificial flavors, man-made substances, or added colors.<\/p>\n

That\u2019s all it takes!<\/p>\n

It shouldn\u2019t come as a shock that companies across the food industry are taking advantage of this loophole. And many foods \u2013 that most consumers would consider totally unnatural \u2013 are being packaged as \u201call natural.\u201d<\/p>

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Of course, this ruse couldn\u2019t last forever.<\/p>\n

Although many industry players have come under fire for misusing the term, not all companies are created equal. In fact, one remains perfectly primed for steady returns.<\/p>\n

Kellogg Company<\/b> (K<\/a>), for instance, recently received some bad press because of its use of \u201call natural\u201d branding on its Kashi products.<\/p>\n

Last month, the company agreed to stop using the term \u2013 and it\u2019ll pay $5 million to settle the lawsuit.<\/p>\n

Now, many believe Kellogg\u2019s decision will set off a chain reaction throughout the food industry, with companies rebranding their foods before legal action comes their way, too.<\/p>\n

What you should be interested in, however, is how Kellogg\u2019s stock handled the fallout.<\/p>\n

Unparalleled Market Dominance<\/h3>\n

Amazingly, instead of taking a tumble, the stock only shot higher<\/i> after it announced the settlement. (It\u2019s come down a bit recently, but it\u2019s still trading slightly higher than it was before the news hit.)<\/p>\n

How was the stock able to weather the storm?<\/p>\n

Simple\u2026<\/p>\n

Kellogg boasts eye-popping fundamentals that not only kept it afloat when disaster struck, but will also send shares higher in the weeks and months to come.<\/p>\n

Consider these two factors in particular\u2026<\/p>\n

Factor #1: Killer Product Lineup.<\/b> Kellogg\u2019s product portfolio is loaded with some of the most respected and battle-tested brands on the planet. From Frosted Flakes, to Pop-Tarts, to Eggo Waffles, Kellogg is synonymous with breakfast and snacking.<\/p>\n

In fact, from its humble beginnings in 1898, the company \u2013 which, by the way, boasts a massive $25-billion market cap \u2013 produces and markets over 1,600 foods. Plus, it\u2019s the world\u2019s leading cereal company, the second-biggest producer of snacks and cookies, and a standout in the frozen food space.<\/p>\n

All told, that adds up to a dominant market presence and a massive engine for growth and innovation down the road.<\/p>\n

Factor #2: Bolstering Its War Chest.<\/b> In May, the company announced an array of new cereal, snack and frozen food products that should provide huge top-line sales momentum. And better yet, many of these new products are offshoots of existing Kellogg brands. Talk about a clever move!<\/p>\n

Here\u2019s just a sample of what\u2019s coming down the pike: Kellogg\u2019s Jif cereal, Rice Krispies Multi-Grain Shapes, Morningstar Farms breakfast sandwiches and Keebler S\u2019more cookies.<\/p>\n

Unmatched Value to Sweeten the Deal<\/h3>\n

Considering its market dominance, you might think that Kellogg\u2019s shares would be priced to perfection.<\/p>\n

But that\u2019s simply not the case. In fact, Kellogg is an undervalued gem.<\/p>\n

\"\"<\/p>\n

As you can see from this graph, Kellogg carries a trailing price-to-earnings ratio (P\/E) of 13.12. This is significantly below the broader market\u2019s P\/E (19.1), and less than half of its sector\u2019s P\/E (25).<\/p>\n

That\u2019s untapped, unlocked value just waiting to bust out!<\/p>\n

In fact, with analysts calling for Kellogg to earn $4 a share this year, the stock is worth $76, compared to the S&P 500 ($4 X 19.1). That\u2019s an instant $10 increase from a recent trading price of $66.<\/p>\n

To top it off, compared to its competitors, Kellogg\u2019s shares are worth a whopping $100 ($4 X 25)! Factor in that same recent price of $66, and Kellogg shares could jump by 50% \u2013 and still be in line with competitors.<\/p>\n

Talk about upside!<\/p>\n

It also doesn’t hurt that Kellogg pays a solid 2.8% dividend.<\/p>\n

Bottom line: Backed by solid fundamentals and a dominant market presence, this undervalued gem should find its way into just about anyone\u2019s portfolio \u2013 even if its products aren\u2019t as \u201cnatural\u201d as its labels suggest.<\/p>\n

Onward and Upward,<\/p>\n

Wayne Burritt<\/p>\n

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Kellogg\u2019s Superior Technical Outlook<\/h3>\n

Kellogg\u2019s stock has been in the midst of a blazing run. All told, from a low of $57 in February to a recent price of $69, the shares have jumped 21%. Not bad for a few months\u2019 work!<\/p>\n

And don\u2019t forget: Trends tend to stay in the same direction, unless there’s a significant fundamental reason for them to change.<\/p>\n

Plus, in April \u2013 and then again in July of last year \u2013 the shares took a stab at tough resistance in the $65 to $67 range. Both times the stock retreated. It made another attempt this past April, but pulled back again.<\/p>\n

Then, in May a break above $67 was successful \u2013 and the shares held. That\u2019s a clear sign of a strong technical outlook for a stock. Plus, it should now pave the way for even loftier highs.<\/p>\n

The post Kellogg Stock Barely Flinches After Lawsuit<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

Article By WallStreetDaily.com<\/u><\/a><\/p>\n

Original Article: Kellogg Stock Barely Flinches After Lawsuit<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com More and more consumers are beginning to wise up to marketing in the food industry \u2013 especially when it comes to the use of the word \u201cnatural.\u201d If you\u2019re unaware, the FDA still hasn\u2019t been able to nail down what a natural ingredient actually consists of. So for now, the FDA won\u2019t stop […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-53060","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53060","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=53060"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53060\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=53060"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=53060"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=53060"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}