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Kraft Heinz

  • 24-06-2019 8:09pm
    #1
    Registered Users Posts: 379 ✭✭ Gangu


    I’m down 58% from where I went in on this share. Feeling glum. Anyone else have views on holding or folding?


Comments

  • Moderators, Business & Finance Moderators Posts: 7,821 Mod ✭✭✭✭ Jim2007


    Gangu wrote: »
    I’m down 58% from where I went in on this share. Feeling glum. Anyone else have views on holding or folding?

    What was your reasoning for investing in it in the first place? Do the assumptions still hold up? If so then perhaps it is a buying opportunity...


  • Registered Users Posts: 379 ✭✭ Gangu


    Jim2007 wrote: »
    What was your reasoning for investing in it in the first place? Do the assumptions still hold up? If so then perhaps it is a buying opportunity...

    No. I suppose they don’t hold up.


  • Registered Users Posts: 379 ✭✭ Gangu


    I’d still be interested in the views of others regarding the fundamentals.


  • Registered Users Posts: 491 ✭✭ Kamu


    According to Yahoo Finance, the new CEO will have have to sell circa 7 billion in assets and cut the dividend payout.

    While selling assets, consolidating it's brand, and pumping investment to, hopefully, increase their sales. If there is a cut in its dividend payout, I would imagine the stock price to drop further.

    So regardless of why you bought initially, to see the stock price increase or to recieve a set dividend, it looks bleak for current stock holders.

    Then again, anything can happen.


  • Moderators, Business & Finance Moderators Posts: 7,821 Mod ✭✭✭✭ Jim2007


    Gangu wrote: »
    I’d still be interested in the views of others regarding the fundamentals.

    Well I don't follow them, but a quick look at the financials raise some questions for me:

    - They seem to be burning up cash
    - Sales and inventory remain stable, but debtors growing..

    On top of this you have the discovery of misconduct that will require a restatement of earnings...

    Then there is a failure to file last years 10-K, from the timing it looks like that should have happened before then need for a restatement, why did it not happen???
    “Our fourth quarter and full year 2018 results reflect our commitment to re-establish commercial growth of our iconic brands, turn around consumption trends in several key categories, and expand into new category and geographic whitespaces," said Kraft Heinz CEO Bernardo Hees. "We are pleased with those actions, the returns on our investments, and the momentum built for 2019. However, profitability fell short of our expectations due to a combination of unanticipated cost inflation and lower-than-planned savings. Going forward, our global focus will remain on leveraging our in-house capabilities, developing our talented people, and delivering top-tier growth at industry-leading margins."

    And this from the CEO is a complete bloody fairy tale! Sales have gone no where and is financed by extending the line of credit and the expected expense savings has not materialised.

    Not very promising as far as I can see... you may have to hold on very long for that recovery..


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  • Registered Users Posts: 379 ✭✭ Gangu


    I only hold a modest number, and so am
    debating the merits of crystallising a loss of 58%. Might have to revisit that though. They seem like a very big ship off course. Hard to steer back on course.


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