Topic: How To Invest

Spinoffs, Takeovers and Special Situations Hotline – Friday, July 20, 2018

Article Excerpt

CAMPBELL SOUP CO., $40.50, symbol CPB on New York, makes a variety of food products under the brands Campbell’s Soup, Pepperidge Farm, V8, Bolthouse Foods and others. The stock fell 40.0%, from its peak of $54.37 on August 23, 2017, to its recent low of $32.63 on June 7, 2018. While it has since regained some of that, Campbell continues to see weak demand for its canned soups and its Bolthouse fresh food products. The price decline also reflects investor concerns about the company’s recent purchase of snack food maker Snyder’s-Lance for $6.1 billion. The move made sense, as sales of snack foods are growing faster than Campbell’s other products. However, the acquisition pushed up its long-term debt to $8.1 billion as of April 29, 2018 (from $2.5 billion on July 30, 2017). That’s a high 66% of Campbell’s $12.3 billion market cap. The depressed stock price prompted the company to launch a strategic review of its operations. That could lead to the…