Jim Cramer’s Best Performers List: Top 10 Picks

5. Kellanova (NYSE:K)

Number of Hedge Fund Holders: 45

Kellanova (NYSE:K), formerly known as Kellogg Company, operates in the snack and convenience food sector, delivering a wide range of products across North America, Europe, Latin America, Asia Pacific, the Middle East, Australia, and Africa.

In October 2023, Kellogg Company separated its North American cereal division, forming WK Kellogg, while the remaining brands and regions were rebranded as Kellanova. As per management, the spin-off would lead to a snack-focused business with greater growth potential.

As part of his list of the top performers on the S&P 500 over the past three months, Cramer commented:

“You’re always going to get a takeover in the top 10 but this one really came out of the left field. Kellanova, the snack food company created when the old Kellog broke itself up. It’s being bought by the privately held Mars for a huge $35.9 billion price tag. Now, almost no one saw this one coming because we’re constantly being told that snacks are a dying category thanks to the GLP-1 weight loss drugs. Mars clearly doesn’t think so, and nobody knows junk food better than they do and that’s why the stock of Kellanova was up almost 40%.”

In August, Mars, Incorporated announced plans to acquire Kellanova (NYSE:K) for $83.50 per share in cash, amounting to a total value of $35.9 billion, which includes the assumption of net leverage.

The acquisition represents a significant addition to Mars’s already extensive portfolio, which features well-established billion-dollar brands in snacking and confectionery, including SNICKERS and M&M’S.

The acquisition will also broaden Mars’s health and wellness snacking portfolio, incorporating products like RXBAR and NutriGrain that align with current global trends. It is expected to resonate well with consumers increasingly focused on health-conscious choices.

The completion of the transaction hinges on Kellanova’s (NYSE:K) shareholder approval and other customary closing conditions, including regulatory approvals, with expectations set for closure within the first half of 2025.