Kraft's Cheese Has Already Been Moved Far Enough
Stephen Simpson, CFA
Stephen Simpson, CFA
Wed, Jul. 20, 10:11 AM| Wed, Jul. 20, 10:11 AM | 2 Comments
Mon, Jun. 27, 6:23 PM
- A lawsuit filed by options and future traders charging Kraft Heinz (KHC -0.1%) and Mondelez (MDLZ -2.1%) with price rigging will be allowed to proceed following a federal judge's ruling.
- The traders say the food giants illegally manipulated the price of wheat at their expense. At issue is a large late 2011 purchase of wheat futures that the plaintiffs say violates Sherman antitrust law and the Commodity Exchange Act.
- That charge moves forward, though a related claim that the two companies ran "wash trades" for a decade to hide manipulation was dismissed (and can be brought again).
- The case is similar to allegations raised by the Commodity Futures Trading Commission, which had previously noted Kraft Foods bought $90M in wheat futures in December 2011 to take a dominant position in the market without ever intending to take possession of the wheat.
Fri, Jun. 24, 11:05 AM
- Among consumer stocks covered by Susquehanna, the analysts say Mondelez (MDLZ -4.3%) and Coca-Cola European Partners (CCE -5.4%), along with Sodastream (SODA -2.7%), have the greatest earnings downside from a euro and pound that have gotten, well, pounded.
- The euro is currently down 2.3% against the dollar, while the pound is down 8.5%.
- "For those seeking to buy the dip, we would prefer MDLZ over CCE," the firm says, noting that 100% of CCE's revenues are exposed to those two currencies, it faces structural risks, and Coca-Cola's 48% ownership of CCE makes it an unlikely acquisition target.
- Acquisitive companies with U.S. dollar assets could go hunting in Europe, the analysts say, pointing to likely suitor Kraft Heinz (KHC -1.8%) -- a top pick for the firm, along with TreeHouse Foods (THS -0.6%) and Molson Coors (TAP -3.3%).
- Meanwhile, the possible ascendance of UKIP leader Nigel Farage in the UK or "anything that makes a Donald Trump presidency more likely" is bad for Mexico-heavy Constellation Brands (STZ -1.2%).
Wed, May 4, 4:18 PM
Fri, Feb. 26, 9:17 AM
- Gainers: RRM +49%. SUNE +31%. AMTG +31%. SGMS +27%. STMP +26%. GOL +19%. SPLK +17%. JCP +16%. HLF +13%. BIDU +11%. SYN +10%. GLBL +8%. WLL +9%. FCX +7%. CHK +7%. PANW +8%. NRF +6%. TCK +6%. MRO +6%. KHC +6%. GRPN 5%. HLT 5%.
- Losers: RJET -83%. PPHM -60%. CARA -36%. WTW -28%. SWN -14%. GG -11%. FOLD -9%. RBS -8%. MNKD -6%. ARI -5%.
Fri, Feb. 26, 8:03 AM
- Investment firms are buzzing over Kraft Heinz (NASDAQ:KHC) after the company navigated around F/X challenges to beat Q4 profit estimates. Ketchup and sauces volume were strong during the quarter.
- JPMorgan raises it rating on Kraft to Overweight from Neutral due to the improvement in margins.
- RBC Capital backs its Outperform rating after the Kraft print. The investment firm sees upside with renovation, innovation, and synergy cost savings all positive factors.
- Susquehanna boosts its price target on Kraft to $104 with the 3G playbook working. Analyst Pablo Zuanic notes the pricing gain of 0.7% by Kraft is strong given that several key commodities fell in price. "We think sentiment will not be affected at this stage by weaker volumes," reasons Zuanic.
- Previously: Kraft Heinz reports Q4 results (Feb. 25 2016)
- KHC +5.4% premarket to $79.00.
Thu, Feb. 25, 4:14 PM
Nov. 16, 2015, 7:46 AM
- The latest 13F from Berkshire Hathaway (BRK.A, BRK.B) shows a new 59.3M share stake in AT&T (NYSE:T), and the GM stake taken up to 50M shares from 41M. At least part, if not all of the T stake is the result of shares received in the DirecTV merger.
- Phillips 66 (NYSE:PSX) is up to 61.5M shares from about 30M; Kraft Heinz (NASDAQ:KHC) 325.6M shares from zero; Suncor (NYSE:SU) 30M shares from 23.3M, John Malone (LMCK, LMCA) a total of about 24M shares from about 13M.
- Buffett trimmed his Wal-Mart (NYSE:WMT) position to 56.2M shares from 58.3M.
- AT&T +1.4% premarket
Aug. 10, 2015, 4:30 PM
- Kraft Heinz (NASDAQ:KHC) says it's still on track to generate $1.5B in cost savings by the end of 2017 through merger synergies.
- For Q2, the Kraft side of the company reported a 3.3% drop in organic revenue off a 2.6% negative impact from volume/mix and a 0.6% decline from lower pricing.
- Heinz organic sales were 5.9% higher during the quarter off strong pricing trends.
- Previously: Kraft Heinz beats by $0.14, misses on revenue
- KHC -2.80% in AH trading.
Jul. 6, 2015, 11:58 AM
- The new Kraft Heinz (KHC +3.9%) opened trading on Nasdaq at $71/share and has jumped nearly 4% so far, after closing its merger late last week.
- Credit Suisse initiates coverage with an Outperform rating and $85 price target, citing KHC's strong potential in both sales and earnings growth over the next several years, and 3G's focus on cost management and reinvestment back into the business that likely will produce a stronger revenue growth outlook.
- "3G's laser focus on cost savings and cash flow, and its pragmatic approach to business make Kraft Heinz's stock a must own for consumer staples investors seeking growth," the firm writes.
- KHC may be interested in purchasing a number of grocery brands owned by Mondelez if the latter decides to sell them, and Credit Suisse sees another significant value creation opportunity for KHC.
Mar. 25, 2015, 12:45 PM
Mar. 25, 2015, 9:11 AM
Mar. 24, 2015, 9:34 PM
- Kraft (NASDAQ:KRFT) finished AH trading at $71.44 following a WSJ report stating the company is in talks to sell itself to P-E firm 3G Capital. Mondelez (NASDAQ:MDLZ) rose 3.3% to $36.18, and ConAgra (NYSE:CAG) rose 1.9% to $35.27.
- The WSJ has added more details. Sources state a deal could be announced soon, and that 3G would use previously-acquired Heinz to make the purchase. It now calls buyout talks "advanced," and highlights 3G's track record of aggressively cutting costs at consumer companies it has acquired.
- The paper speculates Kraft "could be valued at well over $40 billion," given typical M&A premiums. The food/beverage giant closed AH with a $42.6B market cap.
Mar. 24, 2015, 7:12 PM| Mar. 24, 2015, 7:12 PM | 35 Comments
Mar. 18, 2015, 9:19 AM
- Shares of Kraft Foods (NASDAQ:KRFT) slide in early action after the company's macaroni and cheese recall hits more local TV newscasts than most food recall stories.
- Food analysts think the product could see a minor sales slide off the development before recovering.
- Previously: Kraft recalls 6.5M+ mac & cheese boxes after metal found (Mar. 17 2015)
- KRFT -1.2% premarket
Feb. 17, 2015, 8:13 AM
- Kraft Foods Group (NASDAQ:KRFT) pulls back James Kehoe from Gildan Activewear to be its new CFO.
- Kehoe has a long history at Kraft and Mondelez, but left to be the Gildan CFO in December.
- KRFT +0.3% premarket.
The Kraft Heinz Co. produces processed food and beverage products. It is a newly formed company resulting from the merger of Kraft Foods Group, Inc. and H.J. Heinz Co. Kraft Foods Group manufactures and markets food and beverage products, including convenient meals, refreshment beverages and... More
Sector: Consumer Goods
Industry: Food - Major Diversified
Country: United States
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