Kraft Heinz Company (KHC)

A really good execution story. Have a lot of intangibles such as shelf space, pricing a little better than competition and mix is a little bit better in their product offering in stores. Felt expectations were very low for the company and execution would be rewarded by investors when they saw what the company could post. Taking out a lot of the legacy costs in their business. Reinvesting in some of their core brands. Good balance sheet. Looking for $57-$58 on fairly conservative estimates.

(Top Pick Oct 12/12, Up 22.83%) Kept the other half when they split. Kept it for a while and sold in May at $57. Not an entry point now.

Consumer staples. He is shifting away from defensive to economically sensitive cyclical names. You get a good dividend of 3.9% that will grow by 5%/year over the next 5 years and has low beta of 0.9. Their spin off has cheaper valuation and will have stronger growth rates. He got out because he was lowering his weightings.

(Market Call Minute.) Has some issues, but given where it is, along with the nice yield of 3.5%, he would buy at these levels.

Approaching the 200 day moving average of $50.89. He is cautious on the consumers’ staples area. Has performed reasonably well and is owned for its defensive properties, which is all fine and good, but this is a business that is not going to be a huge beneficiary of a recovering economy over the next couple of years.

This is the old, tired 1950s/1960s company that has all the old tired brands, trying to rejuvenate them and cutting costs by renovating old factories that are old and costly. 3.5% dividend yield is safe. The big issue for many of these old, tired large caps is what kind of dividend growth are they going to give. Dead money.

A good holding for the long-term but valuations are a little high right now in the entire consumers’ product group. Management has done a good job. You are paying a high teens multiple for growth that hasn’t improved. Pretty fully valued.

Good play on US and international growth. A lot of investors are looking for stable companies with growth. You will probably be safe.

(Top Pick May 17/12, 24.96%) Actually the spin-out, MDLZ-O. He ultimately exited the KRFT-O.

Would you choose Kraft (KRFT-Q) or Mondelez (MDLZ-Q)? Doesn’t follow these closely but does know that Mondelez is a consumer beverage. Probably the better play going forward is Kraft. Good sector to be in. He would probably take a profit on Mondelez and buy Kraft and then maybe staple on some Starbucks (SBUX-Q) as well.

(A Top Pick April 19/12. Up 18.85%.) Sold his holdings but still holds the spinoff Mondelez (MDLZ-Q).

If you own, he would take profits here. They split the growthier part of the business out. This is a slower growing, higher yielding entity but he thinks it is fully priced here.

Kraft Foods (KRFT-Q) or Mondelez International (MDLZ-Q)? He owned Kraft originally and it spun off with the Kraft and Mondelez shares. Held them for a while. Recently sold off his Kraft position as he wants to sell off some of his consumer staple names and going to more cyclical. If you are looking for yield and dividend (close to 4%), Kraft will provide that. Mondelez touches on emerging markets with higher growth snacks businesses and you get a dividend of almost 2%.

(A Top Pick Jan 5/12. Up 11.21%.) Had a 1 for 3 spinoff into 2 separate companies. He bought this leading up to the spinoff which worked out well for him. Started to see some pullbacks in the markets in October November so he stepped out of this.

Spun out their global snack business under Mondelez International (MDLZ-Q), which he loves and would buy here. As far as this one goes, he likes it and holds it. If you have a long-term view, you can buy it.