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Kraft Foods (KFT) is a boring stock from one point of view. The 52-week range is rather narrow -- the low for the year is $25.72 while the high is $31.09. The shares were, however, pretty fascinating during Thursday's extended-hours session. Traders sent the foodstuffs price higher by well over 3% at one point.
The market enjoyed the second-quarter results. According to TheFly, adjusted net income of 60 cents per share was eight pennies ahead of the estimate. Management made good use of the company's brand power to drive results.
Even with the positive reaction to the quarterly numbers, both shareholders and traders have to realize one thing about this stock: It's probably going to be stuck in its range for a while. Obviously, I can't predict the future, but I imagine others would come to the same conclusion after checking out the following chart. It just doesn't suggest a rocket-to-the-moon situation.
Here's what you buy the equity for: the dividend yield. At the moment, the stock is yielding roughly 3.8%. And considering the company isn't expensive, the overall thesis looks reasonably attractive.
Kraft is fine for a core portfolio built with safety in mind. Dollar-cost-averaging on dips would be a smart strategy with this name. It's too high to buy for a short-term gain; you'd have to wait for the next random plunge to even think about something like that. As always, perform your own due diligence before investing your money.
Disclosure: I don't own any company mentioned; positions can change without notice.
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