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First Kraft, Now Hershey Sweet on Cadbury


But does all the chatter really make any difference to the food giant?

I got whooped in Wii Tennis pretty badly last night. I'm trying to figure out exactly when I lost all my hand/eye coordination. Or was it that Atari didn't hone my skills enough to compete with today's generation?

Asian stocks were a bit of a mixed bag. The Hang Seng was off 0.15% but the Nikkei ended 1.61% higher. However, European stocks were in positive territory early this morning. And here in the US, we're currently trading higher.

Here's what I'm focused on today:

(KFT)/Hershey (HSY):
Kraft upped its 2009 outlook.

Within the release, the following snippet caught my eye:

" 'As we complete our turnaround, we're delivering high-quality earnings growth, despite the difficult economic environment,' said Kraft Foods' Chairman and CEO Irene Rosenfeld. 'And we're doing this while continuing to invest in our brands and businesses. As a result, we're well positioned to deliver sustainable top-tier performance, with or without Cadbury (CBY).' "

Rosenfeld's comments echo my sentiment exactly. I'm hip on this company, as I've mentioned before (see Why Kraft Should Stop Chasing Cadbury Bunny) for a bevy of other reasons besides what could happen if it consumed Cadbury.

Some other thoughts:

1. Will Hershey hop in the batter's box and take some cuts as people are speculating? I'm not sure. I think it would be a terrific thing for Hershey to link up. But all the hubbub seems like more of a distraction at this time than perhaps it's worth for Kraft. Kraft is a legend and a force to be reckoned with -- with or without Cadbury.

The shares dipped a smidge in yesterday's session and I see it as an opportunity.

Google (GOOG):
Does Google heart China or what? Baidu (BIDU) shareholders have got to be jumping up and down. (See What China Means to Google.)

Some quick thoughts:

1. As I've said before, I'm much hipper on Yahoo (YHOO) and its prospects, so I'd put my chips there.

2. At the same time, I don't think a battle with the Chinese is going to be Google's death knell, or that it's going to lose its cult-like following just because of this chatter. It's expected to turn out some pretty good earnings and grow. Also, despite concerns, the stock really hasn't taken that much of a hit -- a good sign.

Chipotle Mexican Grill
Justin Sharon points out in his article this morning that Wells Fargo bumped up its rating to Market Perform.

Although I like the food, I'm not quite as sweet on the stock. At $95 and change, I think its a tad overextended, given the 2010 estimate of $4.11 (even though there could be some upside to that number). I'd much prefer to munch on McDonald's (MCD), or even sip on Starbucks (SBUX), for that matter.

Toll Brothers (TOL):
Barclays lopped its rating to Equal-weight.

My two cents:

1. I've been nothing but complimentary in the past about the products this high-end homebuilder puts out. Nothing has changed on that front.

However, I also haven't been excited about the stock for quite a while, and nothing's changed on that front, either. Many of the folks that have the wherewithal to drop half a million or more on a home are still worried about their jobs, and savings are still in hunker-down mode. The prospect of rising interest rates is another variable that could throw a fly in the ointment for the upper-end homebuilders.

Bottom line, I agree with the downgrade.

Have a great day!

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No positions in stocks mentioned.

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