Ch-ch-ch-cha-changes…
Turn and face the strange.
Remember that old David Bowie tune?
If so, congratulations… you’ve made it this far, Boomer! (As a “Boomer” myself… I can say that!)
Things are changing, we can’t deny that…
And those changes are being felt across the board – in both the personal and the business world.
Financial Darwinism is in full affect – adapt or die…
And many companies find themselves in the unenviable position of having to adapt or watch their business go the way of the Dodo.
One such company has been around for a LONG time…
It’s a staple of American business – and the changes the company is making may set a trend for the future.
Do you know who it is?
So…
Which company is changing its business model?
I’d give you three guesses – but we don’t have that kind of time.
It’s Kellogg (K).
That’s right, food giant announced recently that it’s making some changes in its model…
As Kellogg management is now planning to split into three separate companies.
So, what does this mean for the company that put Corn Flakes on the map?
So far, it means an increase in its stock price.
But Kellogg had to make a change…
Americans have been turning to snacks and fast-food chains in lieu of breakfast at a steady rate over the past few decades…
And that has caused sales growth of the company’s North American cereal segment to drop off.
This isn’t a new dilemma for the cereal king…
Kellogg knew this was coming – so, it kept up with the times – focusing on building out a faster-growing snack business that includes brands like Pringles, Cheez-Its, and Pop-Tarts.
And this segment is HUGE…
As it accounted for $11.4 billion, or 80%, of the company’s total sales last year.
With things going so well in this non-cereal department – Kellogg has decided to double down on branching its food segments…
With plans to spin off its North American cereal and plant-based products – which make up the other 20% – to create THREE independent companies by the end of 2023.
For markets…
This is a win-win scenario – as the move should allow each company to innovate more and grow faster – since they won’t have to compete with one another for internal resources.
As a bonus, this move will create a profitable, plant-based play for investors…
Who have been burned by companies that haven’t reached a profit in three years – such as Beyond Meat (BYND).
And as I said, investors loved the idea…
As Kellogg’s shares shot up 7% after the announcement.
That said…
This may be the new trend around the industry – as Mondelez International (MDLZ) – followed the diversification suit by agreeing to buy energy-bar maker Clif Bar for $2.9 billion.
Now, instead of just being the Oreos and Cadbury chocolates company…
It’s now in the healthy snack side of the industry.
Adapt or die, right?
The same could be said for investment strategies…
Many people are losing money in the stock market right now – because they’re trying to do the same old thing and expect the same result. That’s not going to happen on today’s Wall Street.
If you want to make money – you have to be accurate with you picks…
And nothing is more accurate than the data and numbers these companies put out – and the GorillaTrades system analyzes and finds the stocks that are on an uptick…
It’s why the downturn hasn’t affected us – as our picks are based on numbers and data only. No hunches… no guesses. Just data.
We’d love to have you around for the next pick – which is why I’m urging you to subscribe to GorillaTrades today.
Our next one could be the biggest of the year…
So, please, don’t wait – subscribe today.
If not – you may want to look at Kellogg – it may be a nice fit for your portfolio.
Until next time…
“The world will not be inherited by the strongest, it will be inherited by those most able to change.” – Charles Darwin
