Amid a sharp decline in revenue and the after-shock of
dividing the company, spinning off a new global snacks unit
Mondelez International Inc.
in October 2012, Kraft Foods Group
reported last month that its fourth-quarter earnings were down
72%. In 2011 the company's largest investor Guru
was against this split that meant the Kraft company would
separate 95,000 trademarks and divide billion-dollar brands of
chocolate, cookies and other foods and beverages. At that time,
Buffett said in a CNBC interview: "Whenever a company makes a
deal, I go to the store and I buy a congratulations card and I
buy a sympathy card. And then five years later I decide which one
to send." On Dec. 31, 2012,
reduced his KRFT position by 94.52%.
In the planning stages of the spin-off, Kraft management felt the
spin-off would offer investors the best of both worlds. According
to a GuruFocus feature at that time, "Kraft can now take
advantage of Cadbury's excellent marketing and distribution
networks in emerging markets like India, China and Brazil to help
propel the growth of new products it plans to launch in these
economies. Already, emerging markets are a significant growth
driver for Kraft, and the company feels that the growth of the
Global Snacks Division is somewhat nullified by the stagnant
nature of the North American Grocery Division. Thus spinning them
off will help it realize high value for both the companies to
provide higher returns to its shareholders."
However, following the October 2012 division of Kraft Foods into
two businesses, a North American grocery company and a global
snacks company, Investor Gurus joined Warren Buffet and began
unloading KRFT. In the quarter ended Dec. 31, 2012, Gurus Daniel
Loeb and Louis Moore Bacon sold out their KRFT shares. Joel
Greenblatt reduced his KRFT by 82.74%, and other Gurus including
Mario Gabelli, Jeff Auxier, Manning & Napier Advisors,
Hotchkis & Wiley, Jean-Marie Eveillard and Steve Cohen also
reduced their shares by 64% to 73%.
Prior to that, in summer 2012 MDLZ trading was mixed for
investors. In the quarter ending June 30, 2012, Buffett reduced
his MDLZ position by 24.6%, leaving him with 58,826,390 shares.
Buffett's MDLZ holding history:
Other Gurus sold out their MDLZ the same day, including Bill
Ackman, Steven Romick, First Pacific Advisors, Chris Davis and
Tweedy Browne. Meanwhile adds were made by Paul Tudor Jones for
58.49%, Pioneer Investments for 29.65% and Jim Simons for 79.56%.
Here is in-depth information on Guru trades of MDLZ.
More Kraft in the news: Earlier this month, Kraft Foods Group
Inc.'s board of directors declared a regular quarterly dividend
of $0.50 per share of common stock. This dividend is payable on
April 12, 2013 to shareholders of record as of March 29, 2013.
Finally, the packaged-food maker Kraft Foods Group Inc. joined
the Nasdaq 100 index today.About GuruFocus: GuruFocus.com tracks
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