Abel Guevara

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Presented by Abel Guevara Michael Wolfe Duy
Nguyen Tetsumin Tokumura Cara Labardini Thomas
Willman
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History of Kellogg

• Accidental creation in 1890 by Will Keith Kellogg
  and Dr. John Harvey Kellogg
• Through their experimentation with wheat, the
  brothers happened upon a process of flattening
  the wheat berries into small, thin flakes.
• February 19, 1906, the Battle Creek Toasted Corn
  Flake Company was created and renamed in 1922 to
  the Kellogg Company.

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History of Kellogg

• Distinguishing philosophy that urges people to
  improve their health by changing their eating
  habits.
• W.K. Kellogg was one the first American
  entrepreneurs to recognize the potential of
  international markets.
• Kellogg was the first company to print nutrition
  messages, recipes, and product information on
  cereal package side and back panels.

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• In 1924 the Kellogg's established the Kellogg
  Company of Great Britain.
• Today, Kellogg
  produces more than 40 different
  cereals with plants
  in 19
  countries, on
  six continents and markets
  its products in more than 160
  countries. The company employs 15,657
  people in its worldwide organization.

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BOARD OF DIRECTORS
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BOARD OF DIRECTORS
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ANALYSIS OF THE BOARD OF DIRECTORS

• Required to have at all times an Audit Committee,
  a Compensation Committee, and a Nominating and
  Governance Committee.
• The chair develops the committees agenda and
  presents it to all directors.
• The composition consists of highly qualified
  members who are and have been affiliated with
  large companies and corporations.
• The board consists of two females and nine males.

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Suggestions for improvement

• Include more females to diversify the staff.
• Limit the number of affiliations each board
  member has with other companies.

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Kellogg Ownership
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Ownership Statistics
5 Ownership
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The Kellogg Products

• Kelloggs
• Founded in 1906, Kellogg produces
• great-tasting, high-quality foods, marketed
• in more
• than 160
• countries.
• Brands include
• Apple Jacks, Kelloggs Corn Flakes,
  Corn Pops, Froot Loops, Kelloggs Frosted Flakes,
  Mini-Wheats, Rice Krispies, Special K,Eggo,
  Pop-Tarts, and Nutri-Grain.

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The Kellogg Products

• Keebler
• Keebler, founded in 1853, is the second-largest
  cookie and cracker manufacturer in the country.
  Keebler was acquired by Kellogg in March 2001.
  Brands
  include Austin,
  Cheez-It, Chips
  Deluxe, Club, Famous
  Amos, Fudge Shoppe, Keebler, Murray,
  Plantation, Sunshine, Town House and Zesta.
  Through its Little Brownie Bakers subsidiary,
  Keebler is also a leading licensed supplier of
  Girl Scout Cookies. Keebler icons such as Ernie
  Keebler are among the most recognized
  characters in advertising.

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The Kellogg Products

• Morningstar Farms
• The nations leading vegetarian frozen food
  brand. Made with sun-ripened vegetable goodness
  and expertly seasoned. Products
  include
  vegetarian hamburgers,
  hot dogs, chicken, buffalo wings,
  breakfast sausage and bacon,
  and egg
  substitutes. These products are made from
  all-natural ingredients with minimal processing.
  Vegetarian products include meatless burgers,
  poultry, corn dogs, chili and breakfast meats.

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The Kellogg Products
Kashi Kashi was created in 1984 to help people
make healthy changes to their lifestyles. With
all-
natural food products
such as
cereals,
whole-
grain
rice,
crackers
and the GoLEAN slimming system,
great taste is combined with a healthy diet. Each
product is minimally processed and free of highly
refined sugars, unnecessary additives, and
preservatives
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Sales Break Down
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Competition
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FINANCIAL RATIOS
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FINANCIAL RATIOS
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FINANCIAL RATIOS
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FINANCIAL RATIOS
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FINANCIAL RATIOS
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FINANCIAL RATIOS
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Kelloggs share price, daily trading vol, and
market capitalization
Source from www.MSN.com/ detail quote/ Last trade
(extended hours) 0432 PM ET Financial data in
U.S. dollars
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HPR
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Free Cash Flow To Equity
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Risk Analysis
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The company is currently under priced
Ke(DCF model) Ke(CAPM) 0.1713 gt 0.0113

http//mba.tuck.dartmouth.edu/pa
ges/faculty/ken.french/data_library.html
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Cost of Capital and Optimal Capital Structure
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Debt Ratio
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MM PROPOSITIONS
With tax
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MARKET EFFICIENCY
July 16, 2004

• bad news
• weak form

BATTLE CREEK, Mich., July 16 declared dividend of
.2525 per share on common stock.
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MARKET EFFICIENCY
July 22, 2004

• bad news
• weak form

WASHINGTON, July 22 the unemployment claim
decreased by 11,000.
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Weakness

• Sales is poor
• Current ratio is poor
• Quick ratio is poor
• Debt-to-equity ratio is high
• 40 Insider/5 ownership

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Strengths

• EPS is good
• Current P/E ratio is good
• Price/Sale ratio is good
• Gross Margin is good
• Net Profit Margin is excellent

• Return on Equity is excellent
• Inventory Turnover is good
• Receivable Turnover is excellent
• Stock Scouter rating is 6

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Recommendation
We derived our recommendation utilizing the ratio
analysis and the above mean recommendation table.
Our stock price has grown consistently over the
last 5yrs and is expected to continue this trend,
as shown in our HPR analysis. Based on this
information we suggest to either hold the stock
or moderately buy.
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We are Gggggrrrrrrreeeeeeeaaaaaaatttttt to
invest in!