Wednesday, February 4, 2009

Can Kraft Feed Buffett's Appetite?

One of Warren Buffett's stocks takes it on the chin this morning by posting a 72% decline in profits and trimming forecast for 2009. Kraft Foods(KFT) is trading down -$2.49 to $26.25 in pre-market this morning 2/4/2009. Kraft is the #2 food maker in the WORLD! Buffett usually makes Few but BIG bets and says his holding time frame is forever. I guess when you get to be the size of Berkshire Hathaway(BRKA,BRKB) you do have to hold a long time. Buffet likes companies with good steady cash flows which Kraft has and seems to be passing this on to shareholders in dividends which have been growing steadily. The current dividend is yielding over 4%. Keep in mind WALL STREET likes to focus on earnings, however the Intelligent Investor should focus on the the underlying business and its cash flows. Organic revenue for the 4 quarter and the year 2008 just ended grew 4.4% and 6.6% respectively. Here's a look at Kraft's(KFT) RECENT REPORT dated February 4th 2009.

Author long KFT


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