To that end, the company's management is executing well on its three key growth initiatives, which includes growing the company's base business, becoming more innovative in product development, and expanding the company's brand portfolio and geographical presence through acquisitions.
What's more, it certainly appears as if the company's Comprehensive Continuous Improvement (CCI) program is starting to pay huge dividends. While CCI was initially met with some investor pessimism, the program, which was designed to cut costs and improve efficiency, helped grow the company's consolidated operating income by 3% to $148 million. This is even though there was a meaningful increase in the company's brand marketing expenses.
If there are any concerns, it's with the company's industrial segment, which supplies spices to (among others)
. At some point in 2014, I expect this area to show meaningful improvement.
That said, I would not wait to see improvement before buying this stock, especially with the holiday quarter approaching, which should spark more cooking. It's reasonable to expect that this should fuel McCormick's consumer business. And with improved volumes and growth prospects on the horizon in markets like China, this stock should trade at $75 per share in the next 6 to 12 months.
At the time of publication, the author held no position in any of the stocks mentioned
This article was written by an independent contributor, separate from TheStreet's regular news coverage.