In this post I am going to flag another new (to us) podcast and a related brand new investing book as well as briefly discuss an article concerning ConAgra Brands (“CAG”).
Michael Batnick publishes the great blog The Irrelevant Investor. I think I have it listed in my investing blog/resources section. It’s a good one to check out on a regular basis. He also co-hosts a podcast, Animal Spirits with Ben Carlson of A Wealth of Common Sense. Ben’s blog is really good too. Both are epic Tweeters and are good follows.
Animal Spirits is kind of a lite, ~30 minute, humorous conversation about finance and investing topics. Batnick has also just published a book called Big Mistakes, which does a case study on big investment errors made by great investors.
In this episode of Animal Spirits they discuss the book and some other interesting topics. I recommend you listen to the podcast episode and then get the book(I am ordering as I type):
Carlson also has a book, which I have on my list but have not yet read. This guy was quoted by Bogle in one of this recent books, and is often confused with the HUD secretary, so he deserves our patronage…just saying:
Told You So: ConAgra Edition
While it might be a bit premature (and also a huge negative karma/jinx) to declare “Mission Accomplished” on CAG, I have noticed a trickle of some positive analyst and media coverage. In the most recent example, the WSJ (paywall/$) had an article discussing problems in the CPG/food industry but noting that CAG has been seemingly successful, so far, in renovating their frozen foods brands.
The take in this article, more broadly, was that frozen foods are coming back (like we thought they might). The highlighted CAG and also PF as two firms who are rolling out the frozen Quinoa, “protein,” and Edamame with biodegradable bowls for the Millenials, like champs. For each millennial who gets e-coli at Chipotle, we probably get 5+ people who are ok with frozen food for the duration of their life.
PF really has really done a pretty good job. Their Duncan Heinz single serve product is hot as well. Maybe I would hand in there with Connolly if they did that deal, so long as the premium wasn’t too large. Then again maybe Campbell’s (“CPB”) should do an “aqui-hire” of CAG (a stock deal at a HUGE premium would be acceptable). I bet Connolly could whoop some ass with those CPB brands. I mean PF seems to have good management already in place.
One final thought/pin in frozen foods. I should take another look at Nomad (“NOMD”), Martin Franklin’s European frozen foods platform. He and co-founder have these founder’s shares which basically give them a 20% performance fee on the upside for a while, but you know that’s not really more objectionable to me than the usual compensation packages many executives get. At least it’s not like re-setting the strike price on massive options awards.
On CAG: There was also a CNBC piece that quoted an analyst favorably remarking about CAG’s work on their brands. The Journal also had an earlier piece discussing problems in the industry, but noting that Connolly was an exception and had criticized competitors for simply trying to milk their brands without reinvesting to “build their moats.”
So far, the CAG thesis seems to be intact. I would prefer that Connolly be allowed to move on to working on the other brands; including maybe trying to build Tennessee Pride into a protein juggernaut, like he did with Hillshire and Jimmy Dean, before selling to Tyson’s. If he wants to do a deal, at non-insane valuation however, I should probably just “sit on my ass.”