Here's Why Bill Ackman Is Really Bullish On Kraft, Even With The Cadbury Acquisition

Bill Ackman

Now that the Kraft-Cadbury merger is officially happening, it’s time to inspect the details.

Bill Ackman of Pershing Square has done just that, examining Kraft from the inside out and determining how Cadbury will help it grow its various brands globally.

Ackman even takes a step back from merger mania and evaluates Kraft on its own; as both a company and a stock. Turns out the Easy Mac creator is way undervalued. 

See the full case for Kraft ->

Kraft is already world's second largest food company.

Source: Market Folly

And Cadbury will add to that.

Source: Market Folly

Cadbury has room to grow.

Source: Market Folly

Kraft got a bit of a bargain in its Cadbury purchase price.

Source: Market Folly

Kraft is well diversified in different food categories.

Source: Market Folly

Kraft can actually hold its own.

Source: Market Folly

Kraft can turn itself around and should be bringing in more money.

Source: Market Folly

Kraft's earnings fell into a rut but have since picked back up.

Source: Market Folly

Smuckers and General Mills have the highest profit margins.

Source: Market Folly

Snacks and beverages are underearners that could potentially flourish.

Source: Market Folly

Kraft needs to step its game up and juice its brands for bigger margins.

Source: Market Folly

Kraft's gross margins should be in the 37-40% range.

Source: Market Folly

And don't forget to juice those overseas products, too!

Source: Market Folly

Obviously, Europe is a big opportunity for Kraft.

Source: Market Folly

Why else would Kraft want Cadbury so badly?

Source: Market Folly

Kraft is a solid company with solid stock according to Pershing Square.

Source: Market Folly

Kraft is darn good at giving you a toothache; here's why:

Source: Market Folly

After acquiring Cadbury, over 50% of Kraft's sales will be snacks and confectionaries.

Source: Market Folly

People love snacks - just look at America!

Source: Market Folly

Kraft delivers right to stores, cutting out middlemen:

Source: Market Folly

Kraft + Cadbury = Killing it in the emerging markets.

Source: Market Folly

Kraft can really start pumping up individual food sales, like Easy Mac.

Source: Market Folly

Source: Market Folly

Kraft truly is significantly undervalued.

Source: Market Folly

In two years, Kraft should be priced around $45 a share.

Source: Market Folly

In short, there is plenty of money to be made with Kraft.

Source: Market Folly

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.