Foiled

“When the going gets tough, the tough get going.” - Joseph P. Kennedy

A confluence of headwinds

I don’t own this company, but I’d like to, at the right price. What is the right price? That’s a very good question, which doesn’t necessarily have a straightforward answer. This company faces a confluence of challenges, including input cost inflation and heightened competition. Growth initiatives have been mixed. Volumes and sales have been challenged, and one operating segment faces additional headwinds due to environmental concerns. Now, the company is poised to experience a meaningful impact from tariffs. More than once, efforts to increase profits have been foiled.

This company is currently positioned on the shadowy side of the pond where most investors don’t dare to cast their anchor and fish. That is part of the reason why it is on my radar. Of equal importance, the company has extensive experience navigating headwinds, having been around for a century in one form or another. It holds a portfolio of durable brands. Those brands generate a meaningful level of cash, a significant portion of which is steadily returned to shareholders. Several scenarios can unfold that could make this company’s position appear far worse, but also provide a more captivating opportunity for equity investors.