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Ticker Shock: Why Kraft Is Still Sweet Without Cadbury


Tuesday's top stories and stocks with potential to move.

I got to sleep late, take a few long bike rides, spend some time with my good buddy Sam Adams, and wolf down a couple of burgers. Why can't every weekend be Labor Day weekend?

Asian stocks rose overnight. The Hang Seng was up 2.14% and the Nikkei was up 0.7%. European stocks were in positive territory earlier this morning, too. And here in the US, we're currently trading higher.

Here's what I'm focused on this fine Tuesday morning:

Kraft (KFT):
A swing and a miss?

The company offered more than $16 billion for Cadbury, but Cadbury gave it the thumbs down.

Some thoughts:

This probably isn't over. Kraft may take another stab at Cadbury, and ultimately, the two parties might be able to find some middle ground. After all, a combination would make sense, as it could create a true powerhouse with an array of good eats under its belt. In addition, it would potentially allow it to flex its muscles outside the US, never mind the possible opportunity for cost-cutting.

2. However, even if the two parties don't end up in a long embrace, I'm still keen on Kraft by its lonesome. It has an awesome name when it comes to snacks and food, it offers up a sweet dividend, and is expected to grow a little more than a respectable 8% from this year to next.

For my last take on the company, see Ticker Shock: Eight Reasons Kraft Looks Tastier Than Whole Foods.

There's chatter that at a California event tomorrow, the company could release a cool gadget. Whether or not that will actually happen remains to be seen.

Regardless, the speculation and anticipation of what could be may create a nice little trading opportunity. I might also add that if it makes a new high, it could create quite a buzz, too.

But I'm not looking at this from a long-haul perspective. As I said in an article earlier this month, I think it's way overpriced.

Might Steve Jobs be getting his trademark black outfit ready?
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No positions in stocks mentioned.

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