All, I just made a purchase this morning of a deeply undervalued stock that has operations spanning 150 countries and has one of the strongest balance sheets in the entire world but is now being given away at an almost double-digit dividend yield point. You can subscribe here on Patreon (this would be a good time to subscribe as the recent declines of 30% have spurred action, particularly in the sectors hit the hardest.)… Read the rest of this article!
I have quite a few articles that I intend to publish on the Heinz-Kraft merger engineered by Warren Buffett’s Berkshire Hathaway in partnership with the Brazilian cost-cutters from 3G Capital (Jorge Paulo Lemann, Marcel Telles, and Beto Sicupira), but I have been distracted from the pure investment analysis of the transaction because I have been thinking about the moral and philosophical implications of 3G’s business strategy after taking over the management a company.
Generally speaking, businesses with high-quality profits experience megatrends that can last in five to twenty year increments depending on the industry. First, there is the successful era when revenues are growing by 10% or more. This is when everyone gets excited about the business, and cost controls are ignored with a Sodom & Gomorrahic zeal. Helicopters and Falcon jets for the executives? Sure, no reason you can’t reward the leaders of the team for good work. Wait, … Read the rest of this article!