Is it that miserable General Mills (GIS) quarter and a recognition that there are actually some double-digit decline categories for food like yogurt and single-digit for cereal?
Whatever it is, the magic of the food portion of the consumer-products stocks seems to be gone and the next level of these stocks seems dramatically lower.
You could say it all started with the Amazon gambit, but I wonder if it didn't start with the Kraft-Heinz (KHC) -Unilever (UL) bid, the bid too far where at last we saw there was one left to buy that was consensual and that left the companies to sink or swim on organic growth, and there isn't a lot of it out there.
Plus, with the Fed seemingly endorsing higher rates, there really isn't much to be said about a 2.7% yield other than it doesn't stop a selloff (using the generic yield out there).
This is an amazing moment because ever since the Great Recession, something always saved this group, whether it be takeovers or raw-cost declines or the ever-rising dividends.
But the streak has seemed to run out. What's the investment case for Conagra (CAG) , which has restructured and restructured to no avail? Why own Hershey (HSY) if it said no to Mondelez (MDLZ) , pretty much at any price? Why own Mondelez if, even after all of the restructuring, there's no love?
And why own Kraft-Heinz when there aren't that many costs left to take out and there's negative growth and no one left to buy?
How about lower? Maybe much lower?
This is a defining moment. Most people seem to be focused on Apple (AAPL) and its derivatives being shelled.
I can only thank Matt Horween, my writing partner, for pointing out this incredible, accelerating trend.
For the moment, I just don't see how it can be stopped.
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