McCormick & Company
Consumer Goods | United States
WSD Target Price
Annualized Return Since Publication
Target Equity Value (Δ)
Source: Bloomberg end of day market data; not adjusted for dividends (December 8, 2017).
Returns assume a short investment position on the date that WSD Capital Management published its thesis, and an exit on the date that the WSD Target Price is realized.
Returns do not reflect any taxes, fees or dividend and interest expenses related to short sales.
The returns are hypothetical and do not reflect the actual results of WSD Capital Management’s investment activities, nor is it necessarily indicative of future results of WSD Capital Management’s investment activities.
McCormick & Company (“McCormick”) is a global leader in flavor. The company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry, including retail outlets, food manufacturers and foodservice businesses.
WSD Capital Management announced its short position in McCormick in October 2016. While we remain constructive on the overall industry segment, we believe that McCormick’s equity is valued as a growth company despite tepid earnings growth. We foresee a number of catalysts prompting a re-rating of the company’s equity valuation as deceleration in revenue growth gains momentum (competitive pressures affecting growth in U.S. consumer segment and international industrial segment; balance sheet sensitivity to an environment of higher interest rates), putting further pressure on insider selling.
We exited our short position in McCormick in December 2016.