Heinz: Check Your Mailbox

Apr. 2.13 | About: The Kraft (KHC)

The Heinz (HNZ) ballots were mailed on Thursday, March 28, and the ballots are expected to arrive in the mail this week (April 1-5).

Unfortunately, so far nobody has stepped forward to negotiate a better sales price for HNZ shareholders. Without a late arriving negotiator, the last hope for HNZ shareholders is for a majority of us to Vote No on this ridiculously low offer. The vote to sell the company is set for April 30, 2013 in New York, NY, but absentee shareholders can mail in their proxy votes as soon as the ballots have arrived in the mail.

The S&P 500 stock index is currently providing investors with a dividend yield of approximately 2%, whereas Heinz is yielding nearly 3%, after accounting for the deal premium.

As I have previously written in Heinz, Reject Buffett's Offer, the market was undervaluing HNZ stock and Warren Buffett opportunistically took advantage of the situation. In my view, to the long-term detriment of the current shareholders.

I don't understand why a majority of shareholders would want to sell this business at the current offer price. The only thing that make sense, as I've previously pointed out, is that the HNZ executives are getting a special deal, and that is likely the only reason this sale could get done at this price.

Both Peter Lynch and Warren Buffett have produced incredible returns through purchasing shares in businesses for which they are consumers of the company's products.

I have followed this advice from these two icons of investing, and I've found the strategy beneficial. Over the last few years, I've found myself selecting Coca-Cola products when making a soft drink purchase, selecting Hershey when in the market for candy and buying Heinz ketchup when grilling burgers.

The core portfolio at BigRiverReport.com is essentially comprised of products that many Americans purchase on a regular basis.

As I've worked to identify a replacement for the HNZ position, I can't help lamenting the loss of the satisfaction that I used to get from purchasing those Heinz ketchup bottles knowing that I was receiving a small bit of my purchase price back through the dividend.

If you feel the same way, don't let them take this wonderful company away from us. Go check your mailbox and mail in the ballot with your No Vote!

Disclosure: I am long HNZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.