Lorne Steinberg MONDELEZ INTERNATIONAL INC Common Stock MDLZ-Q COMMENT Nov 11, 2024

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.

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.

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.

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.

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.

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.

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.

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

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.