Kraft Heinz (KHC) was trading 2.3% higher as of 11:50 AM ET today after Morgan Stanley upgraded the stock to “equal weight.” Kraft Heinz fell sharply last month after its earnings miss. It also announced a massive writedown and revealed a subpoena that it received in October. Several brokerages lowered their Kraft Heinz target prices following its earnings release.
Berkshire Hathaway (BRK-B) is Kraft Heinz’s biggest shareholder. It also holds the Coca-Cola Company (KO) in its portfolio, which is otherwise overweight on banking and financial stocks. While calling Kraft Heinz a “wonderful business,” Berkshire Hathaway’s chairman Warren Buffett admitted, “I was wrong in a couple of ways about Kraft Heinz.” He added, “We overpaid for Kraft.”
Speaking with CNBC, in response to whether he would buy or sell Kraft Heinz, Buffett said “I have absolutely no intention of selling. I’ve got absolutely no intention of buying.” Asked why he isn’t buying more Kraft Heinz shares despite the plunge in the stock, Buffett replied, “’Cause it isn’t worth as much.”
Buffett has received a lot of criticism over the last month. Berkshire Hathaway’s buying activity was quite subdued in the fourth quarter despite the sharp fall in the markets (SPY). Berkshire Hathaway also sold some Apple (AAPL) shares even as the stock plunged more than 30% in the quarter.
Jim Cramer had a piece of advice for Buffett. See Jim Cramer Has Advice for Warren Buffett for details.
You can also check out Is Warren Buffett Expecting a Market Crash? for a detailed analysis of Berkshire’s holdings.