My 'Fallen Angels' Favorites For 2020 Part 2: Kraft Heinz

Read Part 1: My 'Fallen Angels' Favorites For 2020 Part 1: IBM
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Fallen Angel #2: Kraft Heinz (KHC)

In a world of investing filled with amazing new battery technologies, cloud computing, artificial intelligence, nano-computing, etc. am I really going to suggest potential stock profits in ketchup and macaroni & cheese?

Yep.

It will be an uphill battle for KHC, but I think they will succeed. In February, the company decided to take a $15.4 billion write-down on Kraft and Oscar Meyer branding, delivered crummy earnings, and disclosed an investigation from the SEC.

That trifecta was enough to drop the stock, literally overnight, from $48 to $35. It drifted into the high $20s before closing at its current $31 and change. That is actually up a few cents this morning in a down market. Populating your growth portfolio with the occasional beaten-down value holding might well provide some much-needed ballast at times like these.

SOURCE: Fidelity.com

I look at the bad news from earlier in 2019 and see a silver lining. KHC has been a superb dividend-paying company with a (formerly!) great history of performance. Now trading at what I consider a sizable discount, this is the ultimate comfort food company, with brands like Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Planters, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-O, Cracker Barrel, and McCafe.

There are those who disparage KHC for being slow to enter the “healthier living” food business. Yo, you say twigs and weeds, I say macaroni and cheese!

Without intending to start a nutritional WWIII, I am one who actually reads the labels. A lot of the alleged health food has more fat, less fiber, and more hype than many of the foods we grew up with.

I love real fruits, real vegetables and real bread and I also buy some packaged foods and condiments. No matter how cleverly “healthy labeled,” packaged and boxed food is still packaged food. Read the labels and you will see what I mean. (I say as I am snacking on a big Gala apple and Kraft Heinz's Planters dry roasted peanuts and smoked almonds.)

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Disclosure: I am long KHC.

Disclaimer: I do not know your personal financial situation, so this is not "personalized" investment advice. I encourage you to do your own due diligence on ...

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