KRFT becomes KHC Monday

Excerpt:

A deal announced in late March that brought together two of the country’s best-known consumer food products companies is now complete and stock in the new Kraft Heinz Company begins trading Monday July 6th on the Nasdaq under the ticker symbol KHC.

The new firm will be the fifth-largest food and beverage company in the U.S. Heinz has been privately held by 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) since 2011.

The two firms paid a total of $11 billion for Heinz. When the transaction closed last week, Berkshire Hathaway had acquired a total stake of 52.5% in Heinz. Buffett and two other Berkshire Hathaway employees will sit on the new company’s board and three 3G Capital executives will also join, including Alex Behring, who becomes chairman. Outgoing Kraft CEO John Cahill also gets a board seat.

Former Kraft shareholders now own 49% of the new company and former Heinz shareholders own 51%. Kraft shareholders also received a special dividend of $16.50 in cash plus one share of the new company for each share of Kraft stock they owned. The aggregate amount of the special dividend is approximately $10 billion and is being funded by 3G Capital and Berkshire Hathaway. The Kraft Heinz Company now owns a laundry list of some of the world’s best-known brands, including Jell-O, Maxwell House, Planters, and Kraft as well as Heinz’s ketchup, soups, and other products. Heinz effectively offered $67 a share for Kraft when the deal was announced in March. Since then Kraft stock has risen to close at $88.9 a share on Friday. The stock’s 52-week high is $91.32.

Comment: Official site.

Kraft Foods spin off cost basis calculator

Spin-Off Information

Comment: scroll down for link to .xls that may be downloaded
Mondelēz International - Tax basis information (PDF)

Comment: My brokerage firm has yet (will they?) correctly allocated the cost.

Image is screen shot of spreadsheet with example.

IPhone 5 madness, Apple and the Dow Jones Industrial Average

First of all I wish I had more than one measly share of Apple. But I have one! (Kathee bought it for me for my birthday). News today that Apple hits it's record high. I suspect it will go higher. There's a link between the news of Apple's record high and the IPhone 5: Apple stops taking iPhone 5 orders after less than 8 hours, suggesting feverish demand.

 Jim Peet and the IPhone: I wish I had one. But I cannot justify it to myself for several reasons: 1.) I don't need it; 2.) I have a dumb flip phone provided by the company and it meets my needs (I'm not a talkative person!); 3.) And I am Mr. Frugal right now.

 My take on the IPhone 5 is that there is no competing device close to touching it. Not RIM (Blackberry)! Not Nokia (Windows 8)! Not an Android device (but close 2nd).

 And my take on Apple is that at $ 700 it is still a reasonably priced stock. Why I don't have more Apple? Elementary: I can't afford it.

 Now the other Apple news is that someone has calculated that the Dow would be above 15,000 if Apple had been added to the Dow in 2009.

 Now the Dow news: UnitedHealth to replace Kraft in Dow 30. Here's the press release:

 Excerpt:

The index change was prompted by Kraft Foods’ plan to spin-off its North American grocery business, to be named Kraft Foods Group, Inc. on Oct. 1, 2012. Following the spin-off, Kraft Foods Inc. will be renamed Mondelez International, Inc. The Dow Jones Averages Index Committee believes that Mondelez’s reduced market capitalization and projected lower percentage of revenue generated from the U.S. makes the company less representative of the U.S. Large Cap market space.

UnitedHealth Group, headquartered in Minnetonka, MN, is a diversified health care services company that provides health care coverage and benefits services to tens of millions of individuals across the U.S., and information and technology-enabled health services.

The Index Committee believes the addition of UnitedHealth Group brings added health care diversification to the Dow Jones Industrial Average, and reflects the growing importance of health care spending in the U.S. economy. The changes won’t cause any disruption in the level of the Index. The divisor used to calculate the DJIA from its components’ prices on their respective home exchanges will be changed prior to the opening on September 24. This procedure prevents any distortion in the DJIA’s reflection of the U.S. stock market.

Comment: In my own view the S&P 500 index is a more valuable indicator of the US stock market. It's not often cited but should be. Another valuable index is the Nasdaq Composite. A good way to invest in the NASDAQ is the PowerShares QQQ™. It is formerly known as "QQQ" or the "NASDAQ- 100 Index Tracking Stock®", is an exchange-traded fund based on the Nasdaq-100 Index®. QQQ is a way to buy Apple because Apple makes up 20% of the QQQ. More on the QQQ holdings here:

SPY (also known as SPDR S&P 500 ETF) is the easiest way to invest in the S & P 500.

Kraft: More spin off details

SPIN OFF OF NORTH AMERICAN GROCERY BUSINESS

 Excerpt:

The company intends to spin-off to its shareholders its North American grocery business, Kraft Foods Group, Inc. The spin-off is expected to occur at 5 p.m. EDT on Oct. 1, 2012. The final effective date and terms of the spin-off of Kraft Foods Group are subject to the approval by the Kraft Foods Inc. Board of Directors and satisfaction or waiver of other conditions.

At the time of the spin-off, each of the company's shareholders entitled to receive shares of Kraft Foods Group will receive one share of Kraft Foods Group for every three shares of Kraft Foods Inc. The record date is not yet finalized, but is expected to be in mid-September. We expect the common stock for both companies to begin to trade on a "when-issued" basis shortly before the record date. Beginning Oct. 2, 2012, Kraft Foods Group will begin to trade on

The NASDAQ Global Select Market under the ticker symbol "KRFT." Kraft Foods Inc. will change its name to Mondelez International, Inc. and change its ticker symbol to "MDLZ." The current ticker symbol, "KFT," will be retired.

Comment: I was hoping it would be more like a split. But hopefully this unlocks value!

Kraft ... spin-off details

Kraft Foods Inc. To Transfer Stock Listing to NASDAQ

 Excerpt:

At the time of the spin-off later this year, Kraft Foods Inc. will change its name to Mondelez International, Inc., and the company's common stock will trade under the symbol MDLZ. Concurrently, the North American grocery business will be spun off to form a new company, Kraft Foods Group, Inc., whose common stock will trade under the symbol KRFT. The symbol KFT will be retired at that time.

Comment: On "Mondelez" = "delicious world" but some people find the name offensive.

The Long, Strange History of Kraft Foods

The Long, Strange History of Kraft Foods

Excerpt:

Few companies in corporate America have as complicated a history as Kraft Foods, the owner of Oreo cookies, Ritz crackers and Oscar Mayer lunch meats. Today, Kraft announced plans to split up, marking yet another shimmy in its background as a mélange of corporations, including Philip Morris, General Foods and RJR Nabisco.

Comment: Soon to split into two. Good for investors!

Kraft reports ... falls

Kraft Foods Q3 Profit Falls on Higher Costs; Sales Jump (KFT)

Excerpt:

Packaged foods giant Kraft Foods Inc. (KFT) late Thursday said its third quarter profit fell 8.5% from last year, despite higher revenue, as higher materials costs weighed on results.

The Northfield, IL-based company reported third quarter net income of $754 million, or 43 cents per share, or 47 cents per share on an adjusted basis. On average, Wall Street analysts expected a smaller profit of 45 cents per share.

Sales surged 26% from last year to $11.9 billion, mainly helped by the company’s recent acquisition of candy maker Cadbury.

Looking ahead, the company reiterated its full-year 2010 earnings forecast of $2 per share.

Kraft Foods shares fell 49 cents, or -1.5%, in premarket trading Friday.

Comment: I bought it at $ 28.73 / now trading at $ 30.80. I still regard it (KFT) as a good dividend paying stock. I am holding.