Kellogg (K) Stock Drops After CNBC Squashes Kraft Heinz Deal Rumors
Bloomberg News
NEW YORK (TheStreet) -- Shares of Kellogg (K) - Get Report are down 5.44% to $82.25 on heavy volume in late-afternoon trading on Wednesday as rumors of a deal with Kraft Heinz (KHC) were squashed.
So far today, 6.38 million shares of Kellogg have traded hands, compared to the average of 2.98 million shares a day.
Earlier today financial journalist David Faber of CNBC was able to confirm that there were currently no talks for Kraft Heinz to acquire Kellogg.
Rumors had previously circulated based on tracking private planes from Battle Creek, MI where Kellogg is located, to Chicago, where Kraft Heinz is located.
TheStreet's Jim Cramer said the situation reminds him of the win-win case in which B&G Foods (BGS) bought Green Giant from General Mills (GIS). The deal gave B&G more brand recognition and gave General Mills a healthier public image.
Cramer thinks Kraft may be working to acquire Keebler, "the very not natural and organic cookie and snack biz of Kellogg," in a similarly beneficial scenario.
"I believe something other than a wholesale acquisition might be going on," he said. "Important to keep this one front and center, especially with Kellogg getting slaughtered today off of the killing."
Kellogg is a Battle Creek, MI-based food manufacturing company known for its cereals.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate KELLOGG CO as a Buy with a ratings score of B+. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: K
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