Summary
Campbell Soup ended the fiscal year on a soft note and issues a soft guidance for 2019, no surprises there.
The company announces its intention to sell a range of activities, as I am wondering what potential sales price looks like.
Having rebounded 20% from the May lows, I find it easy to go back to turn neutral at these levels.
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Campbell Soup (CPB) has been facing troubles for a long time as (activist) investors have secretly hoped for an outright sale of the entire company. This does not appear to be the case, which is disappointing to investors.
In May I concluded that Campbell Soup faces accelerating challenges at the worst moment. This came after the company announced another profit warning pushing up leverage ratios quite a bit, just weeks after closure of the Snyder´s-Lance deal. Continued pressure on sales, margins and high debt continues to create an overhang for the shares.
The only good news in my opinion were the low expectations back in May, providing room to create value (from a low base) provided that the right decisions will be taken. I ended up buying some shares at an average of $33 but have cashed out after a 20% rally towards the $40 mark. This comes as potential for drastic actions and an outright sale seem limited.
