Kraft Looks Like The Tastiest Morsel In Packaged Food
By Stephen Simpson:For reasons that don't make a lot of sense to me, investors continue to reward a host of under-performing food companies with pretty robust multiples. I understand the value of a good brand, and I don't fault investors for hanging on to Coca-Cola (KO) or PepsiCo (PEP) even though neither are cheap, but I wonder why so many investors are happy to pay premiums to hold companies experiencing uncontrollable cost inflation and increasing elasticity from consumers.Amidst that gloomy backdrop, Kraft (KFT) stands out in many respects. Kraft has very strong brands and has actually managed to show less price sensitivity than other North American comps. And while these shares aren't a raging bargain, they look like the cheapest idea in large-cap North American food.
Another Solid Quarter
Kraft's first quarter saw revenue rise 4% as reported, and more than 6% on an organic basis. Although the timing of theComplete Story »