KHC is down heavily after bouts of bad news about accounting investigation, missed earnings estimates and write downs. Recently it has a crash of around 30% in a single day upon the release of a statement disclosing several aspects of this.
Despite its mishaps, KHC is a well established company with entrenched products. These are often fairly low in cost and consumer staples and would perhaps benefit from a softer economy. The PE ratio has dropped dramatically down to 31 from a high of 80. Buffet is a major shareholder of this stock, and although he is down on it and admits he overpaid, he has expressed his intentions to keep it. There has been a lot of trouble and bad news for KHC, but this could all be marked into the price now. Long opportunities on this offer decent upside potential.
From a technical viewpoint, a long term downwards trend line has now been broken, with the current bottoming happening just after the big one day drop. Trends are most often inclined to end in these sorts of dramatic moves, and the forming of a double bottom and break of the trend line after such a move gives the opportunity to buy in and stop loss under the double bottom.
Swing trade: Buy KHC 31. Stop loss 23. Target 77
Despite its mishaps, KHC is a well established company with entrenched products. These are often fairly low in cost and consumer staples and would perhaps benefit from a softer economy. The PE ratio has dropped dramatically down to 31 from a high of 80. Buffet is a major shareholder of this stock, and although he is down on it and admits he overpaid, he has expressed his intentions to keep it. There has been a lot of trouble and bad news for KHC, but this could all be marked into the price now. Long opportunities on this offer decent upside potential.
From a technical viewpoint, a long term downwards trend line has now been broken, with the current bottoming happening just after the big one day drop. Trends are most often inclined to end in these sorts of dramatic moves, and the forming of a double bottom and break of the trend line after such a move gives the opportunity to buy in and stop loss under the double bottom.
Swing trade: Buy KHC 31. Stop loss 23. Target 77