Author Topic: KHC - Kraft Heinz Co.  (Read 81697 times)

rkbabang

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Re: KHC - Kraft Heinz Co.
« Reply #280 on: September 26, 2019, 06:25:22 AM »
I tried the new BK taco & it is terrible.

This & the fact that I've eaten at multiple newly remodeled locations in my area & the food quality in general is poor.

To make matters worse, the ketchup in every single location has been watered down (really?!?)

I sold ABEV because I have no faith in 3G's abilities.


Sorry for the late reply, but I'm just reading this today.  "BK taco?"   Just reading that turned my stomach a little.  I've referred to BK as "the Taco Bell of burger joints" before, so I guess it's fitting that they sell a taco.   I wouldn't eat at BK ever again if you paid me.   My dad was in the hospital for more than a week last summer after contracting salmonella poisoning from a BK, I guess salmonella is no joke at his age (almost 70).  He had no proof, but that was the only thing he had eaten in the last 30 hours when he got sick and he mentioned to my mother while they were eating that his burger tasted off.  The last time I went to BK a few years ago in my area was to get a cup of "JOE", I couldn't even finish it.  Nasty.

I hope your Dad didn’t have lasting effects.

I also hope QSR doesn’t ruin Popeyes, but I won’t hold my breath.

If they roll out a Popeyes personal pan pizza, you can expect the worst.

No he fully recovered, thanks.   LOL "Popeyes personal pan Pizza".   Or maybe just Popeyes Tacos.  They could always introduce milkshakes, maybe license the technology from BH.

« Last Edit: September 26, 2019, 06:27:34 AM by rkbabang »


DooDiligence

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Re: KHC - Kraft Heinz Co.
« Reply #281 on: September 26, 2019, 06:41:22 AM »
I tried the new BK taco & it is terrible.

This & the fact that I've eaten at multiple newly remodeled locations in my area & the food quality in general is poor.

To make matters worse, the ketchup in every single location has been watered down (really?!?)

I sold ABEV because I have no faith in 3G's abilities.


Sorry for the late reply, but I'm just reading this today.  "BK taco?"   Just reading that turned my stomach a little.  I've referred to BK as "the Taco Bell of burger joints" before, so I guess it's fitting that they sell a taco.   I wouldn't eat at BK ever again if you paid me.   My dad was in the hospital for more than a week last summer after contracting salmonella poisoning from a BK, I guess salmonella is no joke at his age (almost 70).  He had no proof, but that was the only thing he had eaten in the last 30 hours when he got sick and he mentioned to my mother while they were eating that his burger tasted off.  The last time I went to BK a few years ago in my area was to get a cup of "JOE", I couldn't even finish it.  Nasty.

I hope your Dad didn’t have lasting effects.

I also hope QSR doesn’t ruin Popeyes, but I won’t hold my breath.

If they roll out a Popeyes personal pan pizza, you can expect the worst.

No he fully recovered, thanks.   LOL "Popeyes personal pan Pizza".   Or maybe just Popeyes Tacos.  They could always introduce milkshakes, maybe license the technology from BH.

Chicken waffles with a strawberry shake would make that invisible sandwich they've got look like an invisible sandwich.

I've always loved their chicken & the sides are great as well.

The shrimp po-boys are pretty tasty too (it's not "Monster Po-Boy" but pretty good for the price).
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Foreign Tuffett

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Re: KHC - Kraft Heinz Co.
« Reply #282 on: October 31, 2019, 06:34:29 AM »
Looks like KHC beat on earnings. Given the company's debt load, it's tough to get excited when volumes continue to shrink ("Volume/mix was 2.1 percentage points below the prior year period as global growth in condiments and sauces was more than offset by lower shipments in the United States"). 


DanielGMask

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Re: KHC - Kraft Heinz Co.
« Reply #283 on: November 02, 2019, 08:38:17 AM »
Brk's 3rd quarter report is out and this note is there again: "evaluated our investment in Kraft Heinz for impairment as of September 30, 2019. Based on the available facts and information, the length of time that fair value was less than carrying value and our ability and intent to hold the investment until recovery, we concluded that recognition of an impairment loss in earnings at September 30, 2019 was not required. However, we will continue to monitor this investment and it is possible that an impairment loss will be recorded in earnings in future periods based on changes in facts and circumstances or intentions."
You should follow me on twitter @ManSalceda

LongTermView

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Re: KHC - Kraft Heinz Co.
« Reply #284 on: November 02, 2019, 01:35:59 PM »
Brk's 3rd quarter report is out and this note is there again: "evaluated our investment in Kraft Heinz for impairment as of September 30, 2019. Based on the available facts and information, the length of time that fair value was less than carrying value and our ability and intent to hold the investment until recovery, we concluded that recognition of an impairment loss in earnings at September 30, 2019 was not required. However, we will continue to monitor this investment and it is possible that an impairment loss will be recorded in earnings in future periods based on changes in facts and circumstances or intentions."

I asked about this on twitter. How is it that there is no impairment when carrying value is $13.8B but fair value is $9.1B?

Gregmal

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Re: KHC - Kraft Heinz Co.
« Reply #285 on: November 02, 2019, 03:07:01 PM »
Well, with any other company, this would be called a red flag, at best. Berkshire gets judged differently though for some reason. Maybe they'll try to salvage the mark to market by taking it private again! The last big elephant!

thepupil

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Re: KHC - Kraft Heinz Co.
« Reply #286 on: November 02, 2019, 03:17:05 PM »
Could be wrong here, but think it’s simply because KHC is an equity method investment and not subject to mark to market either way (up or down).

Cigarbutt

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Re: KHC - Kraft Heinz Co.
« Reply #287 on: November 02, 2019, 05:22:32 PM »
Disclosure: I've been looking at KHC and am leaning towards the relative potential value of the investment at this point in time. Your conclusion about BRK's decision concerning the impairment decision IMO is central to the thought process as to whether this investment makes sense, or not, now.
I would say this was a tough call and will become harder as the burden of proof will build significantly over the next quarters if fair value (market) remains lower than carrying amount.

KHC's market value is considered readily available as it is actively trading in open markets. Under US GAAP, impairment has to be recognized if the FV is lower than CA AND if the decline is determined to be permanent. Once this determination is made, essentially and in most cases (there are exceptions), carrying amount is written down to fair value (where KHC is trading at the end of the reporting period) and the loss is immediately recognized. The key is to determine if the decrease in value is temporary or permanent (as a yes until proven otherwise with an openly traded investment). Given that KHC is openly traded, BRK's decision means that they consider that the market has been wrong and for some time. The fact that the market value is lower than carrying amount is defined as an indicator of impairment but BRK has to consider several factors in order to determine if the impairment is permanent or temporary. There have been exchanges with the SEC concerning this 'issue' (see below). Criteria include the outlook for the equity investment, general economic conditions as well as the ability and intent for the investor to hold the investment for the long run. Although not mentioned (AFAIK) by BRK, it seems that an internal calculation (estimate) of the NPV of future cash flows indicates (used in IFRS to measure the impairment value once considered other than temporary) that their estimated recoverable amount remains equal or superior than the carrying amount.
https://www.forbes.com/sites/alapshah/2019/08/12/obscure-berkshire-hathaway-filing-reveals-what-warren-buffett-thinks-about-kraft-heinz/#65d388023b82
If interested in the technicalities, see pages 143-7 of the pdf document:
https://www2.deloitte.com/content/dam/Deloitte/us/Documents/audit/ASC/Roadmaps/us-aers-a-roadmap-to-accounting-for-equity-method-investments-and-joint-ventures.pdf

For better or for worse, I've decided to wait in order to benefit from the possible outcome when more impairment will need be recognized before they can perceptibly turnaround and get organic growth going while keeping a lid on costs. This window of opportunity may never exist but even Mr. Buffett didn't get the timing right on this one.

LongTermView

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Re: KHC - Kraft Heinz Co.
« Reply #288 on: November 02, 2019, 08:17:06 PM »
AND if the decline is determined to be permanent.

Permanent is a tough word. The https://www.cnbc.com/2019/06/25/billionaire-warren-buffett-denies-any-tensions-in-partnership-with-3g-capital.html interview gives me the impression that the decline is serious:
Quote
“I made a mistake in the Kraft purchase in terms of paying too much,” Buffett said, adding that the writedown of the Kraft and Oscar Meyer brands was an acknowledgement of that. The company is now saddled with roughly $31 billion in debt. “It will take time to whittle that down,” he said.

CorpRaider

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Re: KHC - Kraft Heinz Co.
« Reply #289 on: November 03, 2019, 05:11:46 PM »
Didn't they already respond to the SEC with detailed reasoning for not making an impairment adjustment (discussed in another post on this site)?