July 10, 2025 11:50 AM GMT Investor Presentation: Japan Equity Strategy | Japan M Foundation Sandwich Pressure: Seeking a Safe Haven Between External and Internal Forces (July 2025) Key Takeaways Morgan Stanley MUFG Securities Co., Ltd.+ Sho Nakazawa Equity Strategist Sho.Nakazawa@morganstanleymufg.com +81 3 6836-8926 Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could ...

Group 1: Watsco - Watsco's stock has increased by 991% over the last 20 years, with a 272% rise in the previous decade and a 154% increase over the last five years, although it has seen a 4% decline in the past year [5] - The current dividend yield for Watsco is 2.7%, but reinvesting dividends over the last 20 years would yield a total return of 2,020% [6] - Watsco is a leading player in the HVAC industry, consistently acquiring small distributors and integrating them to enhance sales and geographic reach [6][7] - The company utilizes technology to support HVAC contractors, improving operational performance and ensuring long-term growth prospects as demand for HVAC servicing remains strong [7][8] Group 2: Occidental Petroleum - Occidental Petroleum's stock has dropped about 29% over the past year, correlating with a 21.5% decline in oil prices [9][11] - Despite the stock decline, Occidental has shown strong performance with an 18.6% year-over-year increase in oil and gas production and generated $1.2 billion in free cash flow [12] - The company has maintained a conservative 20% payout ratio from 2020 to 2024, indicating a secure dividend despite lower energy prices [15] Group 3: Campbell's Company - Campbell's stock is currently at a 16-year low, primarily due to challenges in integrating acquisitions and generating high-margin sales growth [16][19] - The company has made significant acquisitions totaling $9.5 billion, which exceeds its current market cap of $9.3 billion, leading to concerns about overpayment [18] - Despite struggles, Campbell's generates substantial free cash flow that covers its 5.1% dividend yield, and its forward price-to-earnings ratio is significantly lower than its 10-year median [19][20]

Kraft Heinz is preparing to break itself up, a decade after an infamous merger of two of the biggest names in packaged foods that was orchestrated by Warren Buffett and Brazilian private-equity firm 3G Capital Partners https://t.co/Fcz1Mmc90t ...

Shares of Conagra Brands fell Thursday morning after the snack foods giant's fiscal fourth-quarter results came in below expectations. https://t.co/Uie4428MfA ...

Group 1: Acquisition Details - WK Kellogg has agreed to be acquired by Ferrero for approximately $3.1 billion, amid challenges from weakening consumer demand due to high inflation [1] - Ferrero has offered WK Kellogg's shareholders $23 per share, which represents a 31% premium over the stock's last closing price [2][5] - The acquisition is Ferrero's largest in recent years and will consolidate brands like Nutella, Kinder, and Frosted Flakes under one umbrella [3][7] Group 2: Market Context - The snacking sector is experiencing increased deal-making activity as food brands face muted sales following price hikes driven by higher input costs and a shift towards healthier options [1][7] - WK Kellogg and other packaged food companies, including J.M. Smucker and Kraft Heinz, have reported subdued demand due to cautious consumer spending in the U.S. [7][10] - WK Kellogg's projected second-quarter net sales are expected to be between $610 million and $615 million, falling short of analysts' average estimate of $653.7 million [8] Group 3: Company Background - WK Kellogg was spun off from Kellanova and represents the North American cereal business of Kellogg, the original parent company [4] - Kellanova, the maker of Cheez-It, is also in the process of being acquired by Mars in a deal valued at nearly $36 billion [4] - Ferrero has expanded significantly through acquisitions, including the purchase of Nestle's U.S. confectionery business for $2.8 billion in 2018, and reported revenue of €18.4 billion ($19.2 billion) for the financial year ending August 31 [9]

Financial Data and Key Metrics Changes - The company is experiencing a cumulative increase of over $2 billion in total delivered costs due to sustained inflation over six consecutive years, starting from the second half of fiscal 2021 [10][11]. - Fiscal 2026 is projected to have a core inflation rate of 4%, with an additional 3% attributed to tariffs, leading to a total inflation impact on costs [21][82]. Business Line Data and Key Metrics Changes - The company is prioritizing investments in volume growth, particularly in frozen and snacks, despite ongoing inflationary pressures, indicating a strategic shift towards maintaining brand health and consumer engagement [12][36]. - The frozen snacks segment has shown a strong consumer response to investments made in the first half of fiscal 2025, leading to a return to absolute volume growth [9][10]. Market Data and Key Metrics Changes - The company is facing significant inflation in material costs, particularly in animal proteins, which are inflating at double-digit rates, impacting overall cost structures [19][20]. - The company has noted a slight decline in total volumes, with scanner data indicating a decrease of about 1%, but anticipates a recovery as supply chain issues are resolved [34][36]. Company Strategy and Development Direction - The company is focused on building brands and driving volume growth, viewing healthy volumes as essential for long-term value creation, despite temporary margin compression due to inflation and increased investments [12][36]. - There is an ongoing initiative to reengineer core work processes using technology, including AI, to enhance growth and reduce costs [14][36]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current inflationary environment is not transitory and expects continued inflationary pressures, but remains optimistic about margin expansion in the future [11][12]. - The company is committed to maintaining its dividend while also investing in infrastructure and paying down debt, indicating a balanced approach to financial management [25][26]. Other Important Information - The company is actively reshaping its portfolio to focus more on growth areas like frozen and snacks, while considering divestitures of non-strategic grocery businesses [68][70]. - The company has seen success with innovative products, such as the Banquet Mega Chicken Filets, which have exceeded sales expectations and contributed to premiumization efforts [95][99]. Q&A Session Summary Question: Should the aggressive investment approach suggest that current industry challenges are more structural? - Management believes the current challenges are not structural but rather a result of sustained inflation and supply chain issues, and they expect margin expansion in the future [12][36]. Question: Can you unpack the 4% core inflation number for fiscal 2026? - The CFO explained that 60% of total costs are material costs, with significant inflation in animal proteins being a major driver of the 4% inflation estimate [21][22]. Question: Why maintain the dividend despite high leverage and capital spending needs? - The CFO reiterated the commitment to an attractive dividend while also focusing on debt reduction and maintaining an investment-grade credit rating, forecasting a cash flow conversion of 90% [25][26]. Question: How does the company view price and promotion in major categories? - Management stated they are not searching for answers to drive volume growth, as they have successfully achieved it in the past and are focused on modernizing brands and investing in high-quality displays [32][33]. Question: What is the outlook for productivity and its impact on gross margins? - Management expressed confidence in achieving strong productivity levels, with expectations of over 5% productivity in fiscal 2026, which will help mitigate inflation impacts [78][80]. Question: How does the company plan to address competition from private label products? - Management noted that while they are below average in private label development, they will monitor competitive pricing closely, particularly in categories like canned foods [85][86].

Key Takeaways SFM shares have jumped 25.7% YTD, outperforming peers and major indexes in the grocery sector. Expansion plans, loyalty rollout and private-label gains are fueling customer growth and efficiency. Sprouts Farmers guides 2025 EPS of $4.94-$5.10 on 12%-14% sales growth and stronger e-commerce traction.Sprouts Farmers Market Inc. (SFM) has been one of the top performers in the grocery space, posting a 25.7% year-to-date gain. The company continues to benefit from shifting consumer preferences to ...

Core Insights - The article emphasizes the importance of efficiency levels in assessing a company's potential for profitability, suggesting that higher efficiency correlates with better price performance [1] Efficiency Ratios - Receivables Turnover measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2] - Asset Utilization indicates how effectively a company converts its assets into sales, with higher values suggesting greater efficiency [3] - Inventory Turnover assesses a company's ability to manage inventory relative to its cost of goods sold, where a higher ratio indicates better inventory management [4] - Operating Margin reflects a company's control over operating expenses, with higher margins indicating more efficient expense management [5] Screening Criteria - The screening process included efficiency ratios that surpassed industry averages, narrowing down over 7,906 stocks to 12 candidates [7] - A favorable Zacks Rank of 1 (Strong Buy) was also included to enhance the profitability of the strategy [6] Selected Stocks - Post Holdings (POST), CarGurus (CARG), and Koppers (KOP) were identified as top stocks based on strong efficiency metrics, each exceeding industry averages [8] - POST reported an average earnings surprise of 22.9%, CARG had 11.8%, and KOP achieved 6% [8][9][10][11]

Conagra forecast profit for this fiscal year below Wall Street’s expectations as the packaged goods company pointed to rising costs from US tariffs https://t.co/g0f0eSjeuP ...

Renowned Food Industry Leader Giora BarDea Joins Beyond Oil to Drive Global Strategic GrowthVANCOUVER, British Columbia and KIBBUTZ YIFAT, Israel, July 09, 2025 (GLOBE NEWSWIRE) -- Beyond Oil Ltd. (CSE: BOIL) (“Beyond Oil” or the “Company”), a food-tech innovation company dedicated to reducing health risks associated with fried food while lowering operational costs, minimizing waste and enhancing sustainability, today announced the appointment of Giora BarDea as VP of Global Strategy. In this new role, Mr. ...