I've just returned from the World Money Show, where some 10,000+ investors gathered to learn about global investing. I had a chance to meet with many of the advisors who were featured at the show, and I am highlighting some of their favorite investment ideas. To view all of the stocks featured in this special global report, click here.
Although based in Maryland, McCormick and Co. (NYSE:MKC) is indeed a global play. Vahan Janjigian says, "McCormick is the largest global supplier of spices, herbs, and seasonings. Its products are sold in nearly 100 countries."
Individual brands, he notes, include McCormick and Zatarain's in the U.S. and Mexico, Schwartz in the U.K., Ducros in France, Club House in Canada, and Silvo in the Netherlands.
The quantitative analyst and editor of The Forbes Growth Investor explains, "The consumer segment, which generated 55% of first nine months sales, makes, markets, and distributes to grocers, supermarkets, mass merchandisers, drug stores, and other retail outlets.
"The industrial segment supplies the food service industry and food manufacturers with compound flavors. Customers include almost all major American service restaurants and food companies.
"In June 2006, MKC acquired Thai Kitchen and Simply Asia from Epicurean International. With annual sales of about $50 million, these brands have been growing at a 32% annualized rate since 2002. Despite steady improvements in margins and earnings over much of the past decade, growth stalled toward the end of fiscal 2005.
"Results were impacted by lower vanilla bean prices, increased competition, higher energy prices, weaker demand from industrial customers, challenging conditions in European markets, and lower sales to regions affected by Hurricane Katrina.
"MKC implemented a number of restructuring initiatives aimed at getting operations back on track. These include raising prices on key brands, shedding low-margin businesses, consolidating global manufacturing, and rationalizing distribution facilities. Though still ongoing, financials are already improving.
"The gross profit margin improved 153 basis points to 40.61%. Europe, where sales fell 1.6% in fiscal Q3, remains problematic. However, weakness in the region should be offset by productivity gains and cost savings from MKC's ongoing restructuring program, as well as from growth in China and other regions. We added this stock to our recommended list on December 27."
Steven Halpern's TheStockAdvisors.com provides a free, daily overview of the latest stock ideas from the nation's leading financial newsletters.
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