Summary
Kraft Heinz doesn't trade at a steep discount to peers where value investors can make a compelling argument.
The company continues to struggle with both top-line and EBITDA growth.
An inflection point will come when the company divests low-margin brands.
I last looked at Kraft Heinz (KHC) in February, and after reading investors' concerns, the principal problems revolve around not only valuation but a lack of impressive organic growth. After watching a lack of positive developments be made in the last six months, it's not a surprise that the stock still trades near its 2018 lows. I believe value will be unlocked for shareholders when the company focuses on improving its adjusted EBITDA margin by focusing more on the North American business and less on external markets, as these weigh on profitability. Despite the low trading price, the stock only looks to be cheap on a price to book basis relative to competitors.
Source: Time
