Andy NasrMONDELEZ INTERNATIONAL INC Common StockMDLZPAST TOP PICKDec 15, 2016

Two reasons stock's been weak. 1) Pantry-stuffing days of Covid are over. 2) Cocoa prices have gone through the roof due to plant disease in West Africa. No easy substitute for chocolate. 

If you buy here, you're betting that cocoa prices fall. Not much the company can do about the supply, and they can't push prices higher or consumers will find another snack. Reasonable entry point today for a 5-year hold, but you have to know what you're signing up for and that's blue skies in Ghana.

He's always had an issue with the "getting paid to wait" thesis. You're getting the dividend, but you could see your capital fall to the point where it wipes out your dividend. Headwinds -- input costs are high, people are eating more healthily, GLP-1 drugs are leading people away from snacks. Foreign exchange also clouds how that translates back to USD.

The consumer staples and package food industry has been flat and prices are a headwind. However there is still upside in the stock and she is bullish longer term. It is OK for a value trade but she would rather have Costco or Dollarama.

Decent company. Has done pretty well since being spun out of Kraft.

Is a top food stock, despite selling a lot of chocolate (in the face of the weight-loss drugs). Pays a 3% dividend and is up 10% this year. The CEO has done a pretty good job.

Down YOY, but has actually held up well during recent market uncertainty. 40% of revenue from EMs, which tend to have stronger long-term, secular growth. Cocoa prices spiked, and chocolate is 30% of its business, so they guided earnings down. Long-term outlook still attractive, expanding into adjacent categories.

Buying Hershey's will be a large purchase for them. MDLZ is attractively priced, but he wouldn't buy. He prefers Lindt, which has outperformed. But he likes staples at this part of the cycle.

Biggest issue is growth. Well run, amazing brands. Valuation north of 20x, yet growth profile not as robust. Economic uncertainty, bit of weakness in discretionary spending.

These companies have traded off on the fears of GLP-1. Volumes starting to drop. Growth metrics just don't support the valuations in the space. About 60% of revenue from international sources, so strong USD is a major headwind.

Trades at 18x PE, with 5% growth. He likes growth at a reasonable price, so 5% doesn't cut it. Stock's moved below 200-day MA, which is falling. Short-term technicals look weak. Demand for GLP-1 drugs will impact a lot of companies in the food business.

Limited private-label competition. During pandemic, good at passing cost increases along to consumers without demand falling off. Concerns about impact of weight-loss drugs has abated. But huge increase in cocoa prices, at 47-year highs. Still happy to own.

It is a large consumer products company and has gone though re-structuring. Pays a rock solid dividend. Although high quality it is low growth so he sees better better value in the field.

International snack giant. 200-day MA is sideways to slightly negative, stock price is now below it. Fundamentals show only mid-single-digit earnings growth, paying 20x for it. Cost pressures, margin compression. Intense competition. Foreign currency has not helped.

For a consumer staples name, look at Loblaw or COST.

Owns shares and would recommend buying. Global consumer goods powerhouse. Strong brand names with sticky adoption rates. Ability to generate profits despite higher chocolate prices. Would recommend holding for the long term. Ability to pass on rising costs to consumers. 

Still likes it. Concern now is that with higher interest rates and rising unemployment, consumers are being more price-conscious. Company has acknowledged this in its biscuit category. 

Reassessing pricing and packaging. EMs are about 40% of sales, she sees higher growth there. Selling assets, redeploying proceeds in higher-growth adjacent categories.