Here's a bit longer look..................
schrts.co
The stock's been under modest "distribution" since the start of 2017. That announcement back in February was a tough one for the shareholders (both individual and institutional) to handle. My motto's always been 'Buy from the Scared, Sell to the Greedy' but there really haven't been any Greedies around since I first purchased.
Going forward we'll see how it does. The shock selling and the quarterly window dressing should be mostly over by now.
Value Line shows KHC with a 3-5 year appreciation potential of $55 to $85/share (annualized at 17% to 29%). Here's what their recent write-up says:
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Apr 12, 2019 CommentaryKraft Heinz shares have continued to falter since our last full-page review in January. In fact, the large-cap stock sank more than 25%, to a fresh 52-week low of close to $30, on the heels of the food giant's fourth-quarter earnings release. The report contained lots of bad news, suggesting a further deterioration in fundamentals at the company, which depends on the sale of branded, processed products, from cheeses to deli meats, that are losing favor with a more health-conscious public. For starters, share net of $0.84 for the December interim came in well shy of our $0.93 estimate, as sales growth remained lackluster (organic net sales were up 2.4%), realized cost savings were lower than anticipated, and margins were hampered by commodity inflation and ongoing investments in marketing and product innovation.
Kraft also announced that it was slashing the quarterly dividend by 36%, from $0.625 to $0.40 a share. (This was done in order to help shore up the balance sheet and give management greater flexibility to pursue accretive acquisitions.) And the company disclosed that the SEC is looking into its procurement accounting practices. This regulatory probe is not overly worrisome, in our view, as the investigation and Kraft's own internal audit are unlikely to result in any material earnings restatements. Yet, the accounting issues have caused the company to delay the filing of its 10-K.
The outlook is murky, at best. Kraft should be able to deliver modest, albeit uneven, top-line progress over the next few years, even as competition remains intense and it looks to divest certain lagging businesses. That's because of likely advances overseas and efforts to leverage strong product categories, like sauces and condiments. Still, execution missteps have prompted us to reduce our margin assumptions for 2019 and beyond. And we now expect share net to slide 19% this year, to the $2.85 mark, before staging a gradual recovery.
Long-term, value-oriented investors may want to take a look here. The shares are untimely (5), however. And the company does not appear to be on the strong financial footing that it once was. Justin Hellman April 19, 2019
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I have enough cash in reserve to continue averaging down if need be. Next buy will be below $30 if we see it. Summer's coming so maybe the stock will start to Ketchup with the rest of the market.......... |
