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Kraft Heinz: A Bullish Case Ahead Of Earnings

ByInTheMoneyStocks.com
AuthorGareth Soloway
Published 05/21/2019, 03:01 PM

Shares of Kraft Heinz Company (NASDAQ:KHC) have been in a spiral lower since 2017. The stock topped out near $100 in January 2017 and has fallen almost non-stop. While the chart is nasty, there are signs of life as traders start to accumulate. First, KHC now pays a 5% dividend yield. With the 10-year yield trading below 2.50%, this makes for an attractive place to park money. Next, Buffet owns a large stake and he rarely loses.

Technically Oversold

Another big factor is the oversold metrics. Almost every technical signal shows an oversold condition with positive divergences starting to appear. This speaks of a coming up move for the stock. Finally, investor sentiment is as bearish as ever on Kraft Heinz. When investors expect the absolute worst, it does not take much for the company to showcase some light at the end of the tunnel and see a short-covering pop in the stock. With earnings due, signals point to an up-move ahead. Calculations show a possible upside target of $41 from its current $32 price.
Kraft Heinz Company

Latest comments

No one is talking about the elephant in the room. As it stands now, they are doomed long term without cutting prices on products (lower margin). What is being done about this or is it a forgone conclusion as customers get more and more comfortable with generic alternatives?. . Kraft has done practically nothing the last 2 decades to curb the onslaught from retailers entering their market and chewing up their market share. They probably thought that they could never compete on quality or that their brand will win in the end. Obviously they were wrong. So what are they going to do about it aside from hemorrhage more market share?. . I think the only reasonable solution is to secure your retail channel before that option is no longer available. In other words, they need to buy out a major retailer and adjust the shelves to favor their products specifically. Which is exactly what the big retailers like Costso is doing with their own generics. Without this, Kraft is screwed.
What happened to them in February?!
when the company will reports earnings?
Yes I do have a small position after this big drop. But a little too early. Buffet owns a ton of this but is he averaging down.
great analysis. I think it's a perfect time to buy
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