Here is an analysis of some advantages and disadvantages of holding Kraft Foods as a stand alone stock.

Advantages:

1. Probably Kraft's greatest asset is its CEO, Irene Rosenfeld, who is determined to turn Kraft Foods into a growth company. Rosenfeld realizes that cost cutting alone will not help Kraft. The company must leverage its existing brands and seek out new markets. To that end, CEO Rosenfeld has reorganized corporate decision-making so that regional managers are much more accountable for seeking out new acquisitions and licensing agreements in their regional markets. Rosenfeld is particularly keen to boost Kraft's presence in Russia, Ukraine, Brazil and Mexico. Revenues increased 8.9% in developing markets. This number will get larger under Rosenfeld's strategy.

2. Rosenfeld is willing to trade short-term returns for long-term gains in market share. She has increased marketing budgets for a number of brands. While this increased expense accounts for part of the quarterly drop in profits, it is money well spent to position/reposition brands particularly in developed markets.

3. Kraft Foods will have enough money for strategic acquisitions now that Altria has sold its 89% stake in the company. Kraft will be able to make decisions to suit its own needs as an independent company.

4. In addition to international acquisitions, CEO Rosenfeld is also leading Kraft into new products in US markets. Convenience meals and prepared salads, with and without meat, are two fast-growing segments in which Kraft is launching new products. Kraft has teamed with South Beach Diet to bring out two new chicken salads. Also, Kraft is test marketing four different Fresh Creations salad kits, including nuts, cheese and salad dressing, that come in their own single-serving bowl. Pre-packaged salad sales rose 37% over the past several years.

5. Kraft Foods owns some of the most immediately and easily recognizable food brands on the market: Oreos, Jell-o, Cool Whip, Mac & Cheese, Kool-Aid, Oscar Mayer, Tang, Maxwell House, Shredded Wheat, Grey Poupon, Shake 'n Bake, Cheeze Whiz. These are products consumers do not want to go without.

Disadvantages:

1. Growth in developed markets will be slow and expensive. Even when revenues increase in North American and European markets, higher commodity and distribution costs offset them. Investing in new products and increasing marketing for existing products is a long-term project.

2. Kraft Foods owns seven $1 billion a year brands including Kraft Mac & Cheese, Nabisco cookies, Oscar Mayer meats and Philadelphia Cream Cheese. But Kraft owns so many brands, sales in one sometimes cannibalize sales in another. Kraft owns both Tombstone Pizza and DiGiorno pizza. It owns multiple cookie brands including Chips Ahoy, Fig Newtons and the classic Oreo, which posted a decrease in sales volume despite my personal efforts to prop up the brand. Kraft owns Wheat Thins and Triscuits. Kraft may need to rationalize its brand holdings and shed poor selling and/or lower profit margin brands.

3. Kraft Foods is being squeezed between rising commodity costs and lower-priced private label brands. With rising gas and energy prices, Kraft may find it hard to keep -- let alone expand -- market share for its premium-priced brands.

4. Kraft has committed to spend $5 billion to repurchase shares following its spin-off from Altria Group Inc. It spent $187 million to buy back 5.9 million shares in the first quarter of independent existence. Perhaps that money can be better spent on new product development rather than in propping up the share price.