S of cereal maker WK Kellogg (KLG 30. 77%) rose 34% this week as of noon E. Thursday, according to data vided by S&P Global Market Intelligence.
One week after being added to a slew of Russell Value indexes, it turns out WK Kellogg was indeed a good value investment -- at least in the eyes of Ferrero.
On Wednesday, the Italian chocolate and candy juggernaut announced plans to buy Kellogg for $23 per, mpting this week's spike in price.
The acquisition announcement comes just months after rumors circulated the two merging earlier in February. Nutella and cereal: A perfect match.
Snacking behemoth Ferrero is to brands such as Ferrero Rocher, Tic Tac, Kinder, and Nutella.
While adding Kellogg's cereal brands, such as Froot Loops, Frosted Flakes, Rice Krispies, and Special K, may seem a bit off-course, the acquisition expands Ferrero's foot in the United States.
Image source: Getty Images. -wise, current Kellogg holders are unly to benefit any further, as the company's price is already within 1% of the $23 acquisition price.
Barring the limited potential for a bidding war, or the deal falling through (which would bably harm holders), investors can bably redeploy this capital elsewhere.
This acquisition serves as a reminder not to overlook the multitude of "boring" consumer staples available today at sub-market valuations.
Whether it's Kraft Heinz, Hershey, Tyson Foods, Lamb Weston, or fellow cereal makers General Mills and Post, food stocks were the original recurring-revenue es, offering stability to any portfolio at the right price.
In an era where artificial intelligence (AI) and quantum computing stocks steal most of the hype, it's essential to keep an eye on value opportunities these blue chip food stocks -- just Ferrero did.
Josh Kohn-Lindquist has positions in Hershey. The Motley Fool has positions in and recommends Hershey. The Motley Fool recommends Kraft Heinz and WK Kellogg. The Motley Fool has a disclosure policy.