Kraft Heinz Stock Sinks on $3 Billion Writedown Charge

Kraft's revenue beat analysts' estimates as well

Deputy Editor
Jul 30, 2020 at 2:32 PM
facebook X logo linkedin

The shares of Kraft Heinz Co (NASDAQ:KHC) are sinking today, despite earlier reporting second-quarter earnings and revenue that beat Wall Street's estimates. Meanwhile, organic net sales rose by 7.4%, aided by consumers that bought more products amid coronaivurs-related lockdowns. However, the company recently took a writedown charge on several businesses -- Oscar Mayer and Maxwell House Coffee to name a few -- worth somewhere around $3 billion. In response, Kraft Heinz stock is trading down 5.4%, last seen  at $33.64.

Today's dip has KHC pulling back to its ascending 40-day moving average, a trendline that the equity has closed above all but two times since early April. Since then, KHC has tacked on around 12%, also thanks to the 200-day moving average -- a trendline that acted as a floor for the equity between April and May. Elsewhere, during yesterday's trading, Kraft Heinz stock brushed a new yearly high of $35.87, a 79% premium to its mid-March, all-time low. 

KHC Chart 2 July 30

Meanwhile, the options pits are full of bullish activity. KHC sports a 50-day call/put volume ratio of 8.84 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 97th percentile of its annual range. This means nearly nine calls have been bought for every put over the last 10 weeks, showing a heather-than-usual appetite for long calls of late. 

Today's options pits show a decent amount of activity as well, with over 16,000 calls and 4,247 puts exchanging hands -- double the intraday average. Most popular is the September 40 call, followed by the weekly 7/31 34-strike call, with new positions being opened at the latter. 

Lastly, analysts are divided on KHC. Of the 11 in coverage, six sport a “hold” position. Meanwhile, four more call it a "strong buy," while one lone wolf carries a "strong sell."


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI