Summary
- The risk is moderate, but the upside is limited.
- Investors need to avoid the Fear Of Missing Out (FOMO).
- Kraft Heinz is a great company that needs time. Eventually, it will be a good stock to invest in.
Kraft Heinz (NASDAQ:KHC) is an excellent company with beautiful products and brands that create a strong moat, but it is not the time to buy it.
Considering the risks and uncertainties the company has, it is unclear if the past quarter was a bump in the road or the beginning of the end for an iconic company. Wise investors will wait to see if this is a value trap or a diamond in the rough.
Fragmentation vs. Savings
The food and beverage requirements of the population are changing fast. The days where food and beverage companies could rely on a few SKUs to drive their sales are gone.
Bernardo Hees, CEO of Kraft Heinz, pointed this out during the last conference call. However, the strategy put forward does not fully account for the engineering and production hurdles the company will face by this effect.
