Buy and Hold That Oreo!
Johnathan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
When it comes to investing one of my favorite bits of advice comes from Warren Buffett. The cherry coke aficionado has said many times that he likes to invest in companies that he can understand. Well, me too Warren, so let's take a look at a company that even my two-year-old can jive with: Mondelez International (NASDAQ: MDLZ).
Last week Foolish contributor Nicole Seghetti did a wonderful job giving you the skinny on the company and making you aware of the pending earnings announcement scheduled for Feb. 13 after the market close. What I want to do is convince you that this is a company to ride for the long term and big profits.
So back to Mr. Buffett. Do we understand what Mondelez International does? Yeah, the company sells delicious dreams and goodness in a box, cookie sleeve, or tub of Philadelphia cream cheese to people in "emerging markets." And believe me, everyone loves easily accessible warm feelings with a sugary taste. Of course, there is the fashionable healthy eating trend, and this is nice, but really, nobody is going to give up their Oreos or Chips Ahoy unless they are auditioning for the next season of the Bachelor or Jersey Shore (and in that case they can always chew on some Trident).
For my next trick I would like to call on yet another investing guru, and the guy who I wish was my grandpa, Peter Lynch. When I think of Peter Lynch a few things come to mind: La Quinta Inns, Pep Boys, diworseification, and the power of spin-offs. Mondelez is a Kraft baby and was born in October of 2012. Since its inception the stock has traded in a range between $25 and $28. This is not exactly exciting, but I like it because it is still really early and once the fiscal storm blows over Europe and analysts start to like emerging markets again this stock will look like a rock star. And like Peter said, parent companies like Kraft would not have a baby unless they know the child will reflect fondly on their parent and the kid will start with a healthy financial position and have room to run in the market.
Foolish Bottom Line
Tune in on Feb. 13 to check out earnings for Mondelez International. With a market cap of $49 billion, a P/E of 14.81, and a dividend yield of 1.9%, this is a company to make money with. It has brand power, spin-off momentum, and plenty of willing consumers looking for a delicious moments escape. If it disappoints on analyst estimates, I recommend buying some shares. If it beats expectations and takes a nice pop up, then I hope you already have some Oreos in your portfolio.
Foolish blogger Johnathan Roberts owns shares of Mondelez International and plans to hold them for a long time, but does not own shares of any other companies mentioned in this entry. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!