7 Best Confectionery, Cookie and Snack Stocks To Buy

3. Kellanova (NYSE:K)  

Number of Hedge Fund Holders: 45

Kellanova (NYSE:K) is known for its iconic brands such as Pringles, Cheez-It, Pop-Tarts, RXBAR, Kellogg’s (international), Eggo, and MorningStar Farms. It operates in 180 markets, with principal products including crackers, crisps, savory snacks, toaster pastries, cereal bars, ready-to-eat cereals, frozen waffles, veggie foods, and noodles.

In Q2 2024, Kellanova’s (NYSE:K) reported net sales of $3.19 billion, reflecting a 4% organic growth. Adjusted operating profit surged 16%, with gross profit up 9% YoY. In Snacks segment, net sales grew organically by about 13% year-on-year with broad-based growth across the region led by Pringles.

Nigeria, despite volume declines due to price elasticity and currency devaluation, contributed 16% regional organic sales growth. EPS came in at $1.01, surpassing analysts’ expectations, marking a 14% growth from the previous year.

Moreover, Kellanova’s (NYSE:K) cash flow generation remained strong. The company experienced a YoY increase in free cash flow and maintained debt leverage below target. They also raised their free cash flow outlook to over $1 billion, driven by robust operating profit.

On August 14, an announcement was made that Mars would acquire Kellanova for $36 billion. This acquisition is set to transform Mars into a leading player in the global snacking market, expanding its presence in both sweet and savory categories.

Furthermore, Kellanova’s share price surged 8.61% over the past month and 43.30% YTD, driven by strong financial performance and its acquisition by Mars. It could also be partly linked to the use of AI and ML, which are optimizing its operations and driving innovations.

However, declines in revenue, especially in Europe and Asia Pacific, were noted. Overall, it declined 4.7% YoY due to currency fluctuations and the divestiture of its Russia business. Despite these challenges, the company raised its 2024 guidance, signaling a positive outlook.

As of Q2 2024, 45 hedge funds, with a combined investment of $2.1 billion, remained bullish on the stock, as per Insider Monkey’s database. Considering the company’s performance and outlook, Kellanova (NYSE:K) is featured on our list of the best confectionery, cookie, and snack stocks to buy.