Kraft: Well-positioned for growth

Outside the U.S., Kraft's iconic brands will continue to boost its international performance. Inside the U.S., the new "frugal consumer" stance means Americans will eat more meals at home, a plus for KFT, although there will be some attrition as selected consumers seek out less-expensive generic label competitors. The First Call F2009/F2010 EPS estimates for KFT are $1.96 to $2.06.

Meanwhile, commodity/ingredient costs should continue to remain moderate though FY2010, and an above-average dividend adds to the positive story.

Further, technically, Kraft's chart is in an uptrend, and appears to have put in a bottom, with support at $22 and $20.

The risks include possible disappointing new product launches, and any unforeseen surge in commodity prices, but those are not big enough to negate the Buy rating.

Stock Analysis: Kraft is a moderate-risk stock. Consider buying a 25% position in KFT now; then buy another 25% in four months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your KFT position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $12.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.