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With shares of Kellogg Company (NYSE:K) trading at around $61.42, is K an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Kellogg is dealing with several challenges at the moment, which include cost inflation, intense competition, supply chain problems, a struggling cereal business, poor debt management, and even a lack of innovation. Ouch! These aren’t nice things to say about a company that has delivered such tasty treats through the years. But fear not! Kellogg has a game plan, and it’s more motivated than Meg and Jack White taking on a seven nation army.
Kellogg is a household name. As long as that’s the case, there will be great potential. Kellogg is very focused on cutting costs, and it has seen organic growth as of late. That’s really all you can ask for at the moment. Kellogg is also seeing increased international exposure.
Despite recent headwinds, Kellogg has maintained solid margins. ROE is 44.93 percent. There is a small short position of 1.90 percent on the stock. Not many people are interested in shorting this stock due to the company’s strong future prospects. Past stock performance, which has been exceptional, might also be a factor. Currently, Kellogg is currently trading at 23 times earnings, which is slightly higher than the industry average of 20 times earnings.
Let’s take a look at more important numbers prior to forming an opinion on this stock.
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