What is your opinion of Kellogg Co.?
- D.R., via the Internet
The largest producer of breakfast cereals and leading producer of other convenience foods recorded a 12 percent increase in net income in its third quarter.
Its positives include a strategy of launching new products that are often variations of successful existing products, innovative marketing campaigns and logical cost-cutting initiatives.
There is currency risk from the strengthening U.S. dollar because foreign sales represent nearly one-third of its business. It expects cost pressures to be especially strong in Europe and Latin America.
Fierce competition from other manufacturers, discount chains and the house brands of major grocery chains are a concern for the firm because they limit sales growth.
Shares of Kellogg (K) are down 19 percent in 2008, after gains of 5 percent in 2007 and 16 percent in 2006.
The consensus recommendation on shares of Kellogg from Wall Street analysts is "buy," according to Thomson Financial, which consists of seven "strong buys," six "buys" and six "holds." David Mackay has been CEO for the past two years, replacing James Jenness, who is now chairman. Mackay had worked closely with his two predecessors and was involved in turnaround efforts that enhanced the long-term outlook for the company.
Kellogg earnings are expected to increase 9 percent in 2008 versus 16 percent forecast for the processed- and packaged-goods industry. Next year's predicted 7 percent rise is in line with its peers, as is the expected five-year annualized growth rate of 9 percent.
My grandmother lost her stock certificates. What do we have to do to get new ones?
- B.R., via the Internet
Contact each stock's transfer agent, which is the bank or trust company charged with keeping a record of the firm's shares.
If you don't know who the transfer agent is, your broker can probably help you find it, or you can contact the company.
"Then you need to ask the transfer agent to do a 'stop transfer,' and must also buy an indemnity bond that usually costs 1 [percent] to 2 percent of the current market value of your stock," said Jack Hardy, branch chief with the Securities and Exchange Commission's Office of Investor Education and Advocacy.
E-mail Andrew Leckey at email@example.com.