Nilus Mattive Discusses Wrigley Buyout in Latest Issue of Money and Markets
Jupiter, Fla. (PRWEB) May 8, 2008
Nilus Mattive discusses the success that Wrigley Jr. Co. has had in the past and how Mars Inc. has recently acquired the company. Mr. Mattive explains three important lessons to learn from the acquisition of Wrigley.
William Wrigley Jr. Co. recently announced that it is being acquired by privately-held Mars Inc. and Warren Buffett’s Berkshire Hathaway will be financing the deal. Since the initial release of that report, Wrigley’s stock is up 33.7%. Wrigley has become the world’s largest gum company with about 40% of the global market. The company’s products are now sold in more than 180 countries. And despite all that expansion, the Wrigley family has remained intimately involved in the company. Bill Wrigley Jr. is the fourth consecutive family member to run the company, first serving as CEO and more recently as executive chairman. In 2007, the company sold about $ 5.4 billion worth of gum and candy. There are three important lessons to learn from the Wrigley acquisition:
1. When it comes to stocks, look for big brand names, solid product lines, and a global reach. Listen to what Buffett said on CNBC’s Squawk Box show shortly after the Wrigley deal was announced. When asked if his investment was a “recession-proof play,” he responded,
“Yeah. Both companies have great brands. When I talk to classes of university students, for a dozen years or more I’ve used Wrigley as an example. I haven’t known about Mars except that they’re a private company. But there is really nothing that can go wrong with something like the Wrigley or the Mars brands. It’s literally true that they have, ah, faced the test of time over decades and decades and people use more and more of their products every day.”
2. Even in a bad credit environment, there are still big deals being done. Profitable businesses selling at attractive prices will always be around. And savvy investors will always be willing and able to buy them.
Another quote from Buffett’s interview on CNBC:
“Well, I think a good time to buy a really great business is when you can do it. Many, many years ago, as I remember, Herman Lay offered the Frito-Lay company to Coca-Cola. And he offered them the company first, as I understand it, and they decided for one reason or another they didn’t want to do it then. And of course Pepsico bought it and it’s the best thing they ever did. So if you get a chance to buy a wonderful business, then my advice is, grab it.”
3. When it comes to investing, patience and conviction are rewarded. Investing is about steady returns over time. Taking a longer-term approach helps protect investors against the market’s bumps, and positions them for big, sudden gains.
“Timeless investment principles will never change, the very same principles espoused by experts like Warren Buffett. Those are the strategies investors should consider using. That’s why I love companies like Wrigley so much. To the untrained eye, they seem boring. But to those in the know, they’re classics that have stood the test of time, and will steadily increase in value over time,” Mattive exclaims.
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About NILUS MATTIVE & MONEY AND MARKETS
Nilus Mattive, a financial analyst at Weiss Research, is the editor of Dividend Superstars, a monthly publication and is also the editor of the company’s daily e-letter, Money and Markets. Formerly a senior editor of Standard & Poor’s The Outlook, the oldest continuously published investment newsletter in the country, he has written for a number of investment websites, including BusinessWeek and Individual Investor. Mr. Mattive is the author of The Standard & Poor’s Guide for the New Investor (McGraw-Hill, 2004) and has appeared on the popular investment radio show, Traders Nation, to discuss his views on personal finance.
Mr. Mattive graduated cum laude from the University of Scranton.
Money and Markets (http://www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit http://www.moneyandmarkets.com.
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