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In 2015, rival foodmakers Kraft Foods Group Inc and H.J. Heinz merged their operations into a new company called Kraft Heinz Co.
By cutting manufacturing plants and eliminating overlapping functions, the merger aimed to improve profitability. However, the plan failed to deliver the expected benefits, partly because consumers are eating less processed foods.
The company now aims to boost its value by breaking itself into two separate firms—one will focus on sauces and spreads, while the other will make meats, cheese, coffee and desserts for North America.
By cutting manufacturing plants and eliminating overlapping functions, the merger aimed to improve profitability. However, the plan failed to deliver the expected benefits, partly because consumers are eating less processed foods.
The company now aims to boost its value by breaking itself into two separate firms—one will focus on sauces and spreads, while the other will make meats, cheese, coffee and desserts for North America.
WARNER BROS. DISCOVERY INC. $18 remains a hold. The company (Nasdaq symbol WBD; Consumer sector; Shares outstanding: 2.5 billion; Market cap: $45.0 billion; No dividend paid; Takeover Target Rating: Medium; www.wbd.com) plans to split into two new firms: Global Networks will hold its cable channels (including CNN, HBO, TNT, TBS, Cartoon Network, Discovery, HGTV, Food Network, TLC and Animal Planet) while Streaming & Studios will own the Warner Bros.
On November 3, 2021, IBM spun off some of its computer consulting operations as Kyndryl. Investors received one Kyndryl share for every five IBM shares they hold.
Since then, IBM has soared 110%, thanks to investor enthusiasm for its advances in artificial intelligence and quantum computing. However, due to the low-profit margin contracts it inherited from IBM, Kyndryl is down 20%.
We still like Kyndryl’s outlook, but it will probably make little progress until it sheds those legacy contracts. Meantime, IBM remains a great buy for long-term gains.
Since then, IBM has soared 110%, thanks to investor enthusiasm for its advances in artificial intelligence and quantum computing. However, due to the low-profit margin contracts it inherited from IBM, Kyndryl is down 20%.
We still like Kyndryl’s outlook, but it will probably make little progress until it sheds those legacy contracts. Meantime, IBM remains a great buy for long-term gains.
A: We continue to believe that investors benefit most by holding a well-balanced portfolio of high-quality individual stocks. Still, ETFs can play a role in a portfolio, although we don’t generally recommend investing in an equal-weight fund.
A: Par Technology Corp., $42.76, symbol PAR on New York (Shares outstanding: 40.6 million; Market cap: $1.8 billion; www.partech.com), is a global food service technology company. Par provides software and hardware to restaurants in three major categories: quick service, fast casual, and table service. It also serves the retail industry, including convenience stores and gas stations.
A: Loar Holdings Inc., $77.88, symbol LOAR on New York (Shares outstanding: 93.6 million; Market cap: $7.3 billion; www.loargroup.com), designs, makes, and sells aerospace and defence components.
A: Urban Outfitters Inc., $69.43, symbol URBN on Nasdaq (Shares outstanding: 89.7 million; Market cap: $6.5 billion; www.urbn.com), offers lifestyle-oriented clothing, merchandise and services through a portfolio of consumer brands.
A: Amplify AI Powered Equity ETF, $44.50, symbol AIEQ on New York (Units outstanding: 2.6 million; Market cap: $115.7 million; www.amplifyetfs.com), tracks the AI Powered Equity Index, from EquBot Inc. It relies on IBM’s Watson computer and artificial intelligence to select securities.
The appeal of a “black box” approach to stock picking is seductive. After all, the idea that you can rely on the computer analysis of past markets to accurately predict future markets can be reassuring. That’s especially true in periods of economic uncertainty. Still, we’ve found that it pays to be skeptical, no matter how strong the appeal.