Kraft Heinz: Time to Invest?

Kraft Heinz: Time to Invest?

Does Kraft Heinz's depressed share price indicate a possible value investment ahead of 2019 earnings? Read our valuation and download our annotated annual report.
Kraft Heinz analysis and intrinsic valuation
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It’s now the year 2020 and earnings season is approaching. So I decided to take a look at a company which 2019 annual report I’m very excited to read – and that’s Kraft Heinz.

As you probably know, Kraft Heinz has been hit by a series of troubles and the market value has experienced some terrible few years falling 11% in 2017, 44% in 2018, and another 30% in 2019, from a price of $87 to today’s price of $30.60. Taking account of dividends paid, investors have since the beginning of 2017 suffered a total loss of 64% (59% including dividends).

Kraft Heinz stock chart for 3 years

The biggest blow came on February 22 last year when Kraft Heinz shocked investors with four terrible news in its earnings report: disappointing operating results, SEC investigations into the company’s accounting practices, a massive impairment of goodwill and intangible assets, followed up by a 40% cut in dividends. The stock price dropped 25% on the day after the announcement and until today remains unchanged in light of consecutively disappointing quarterly results in the first three quarters of 2019.

Why is Kraft Heinz so interesting to investigate? I mean, it’s certainly not unheard of for a company to suffer large, multiple hits in a short period of time.

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