Cramer wrote regarding Hormel's decision, "The company will now dominate lunch, particularly the-bring-your-own-lunch contingent -- perfect for a country where the average worker is making less and less each year. Hormel is the player in ham, the No. 1 sandwich meat; this buyout will now make it the No. 2 player in peanut butter, the second-most-favored sandwich. It's incredible how smart that is."
"Plus," Cramer pointed out, "Skippy fits perfectly into Hormel's Chinese strategy, as it can be the best-of-breed U.S. player in two foods that are loved in that country." Now I hear the cash register "ca-chinking" and the flow of new moneys heading for Hormel's drawer.
The five-year chart below is like a picture that paints a thousand words. It not only shows the price but also HRL's declining free cash flow yield (important for sustaining the dividend) and it's improving quarterly income from continuing operations. The purchase of Skippy should help with the free cash flow yield.
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