New CEO Greg Abel Called One of Berkshire Hathaway’s Long-Term Investments “Well Short of Adequate.” Should Investors Sell the Stock?
In 2013, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) partnered with the Brazilian private equity firm 3G to acquire Heinz for an enterprise value of $28 billion. Two years later, they merged Heinz with Kraft to create Kraft Heinz(NASDAQ: KHC), the company investors know today. The investment has arguably been one of Warren Buffett’s worst.
Since the merger, the stock is down nearly 67%, and Berkshire still owns 27.5% of the company. In his first letter to shareholders, new CEO Greg Abel acknowledged that “our return has been well short of adequate.” Should investors sell the stock?
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Kraft Heinz, the maker of well-known food brands such as Heinz Ketchup, Philadelphia Cream Cheese, and Oscar Mayer meats, has struggled amid competition and shifting consumer preferences toward healthier, less processed alternatives.
Some might also argue that 3G, known for imposing major cost-cutting measures, didn’t invest enough in the brands, marketing, and new product development to meet the needs of and engage modern consumers. Regardless, the company has significant debt, and its financial performance has struggled.
While Berkshire has stuck with the stock, its patience has clearly started to fade. In May, the conglomerate relinquished its two seats on the company’s board of directors. At the time, Kraft Heinz had said it would evaluate strategic transactions to unlock shareholder value.
Last September, the company announced it would split into two companies, one focused on brands poised for growth, such as those in emerging markets, and another that included more “beloved brands” and had greater scale, enabling it to generate reliable free cash flow. The Berkshire team was not a fan of this plan. In September, former CEO Warren Buffett told CNBC he was disappointed with it and didn’t think it was the right solution to the company’s issues.
In a Securities and Exchange Commission filing in late January, Berkshire sought to register a potential resale of all its remaining Kraft Heinz shares. The company has written down its investment in the food company by close to $7 billion on two separate occasions, once in 2019 and once last August.
But the story didn’t end there. Kraft Heinz hired a new CEO, Steve Cahillane, starting in January, seemingly to carry out the split, because Cahillane had helped split Kellogg into two companies.
But in early February, he announced it would pause its work to split the company, saying that he believes Kraft Heinz’s issues are “fixable and within our control,” according to CNBC. Cahillane added that his goal is to get the company back to profitable growth, and he announced a $600 million investment to spur these efforts by expanding marketing, sales, and research and development.
While Abel praised the decision, others were less enthusiastic. “Investors will view this negatively because it indicates that the businesses are not in strong enough condition to operate on a stand-alone basis, and it is uncertain when they will,” Robert Moskow, an analyst at TD Cowen — a part of Toronto Dominion Bank — said in research note, according to CNBC.
Given the company’s failure to create shareholder value over more than the past decade, I still view Kraft Heinz as a value trap and “show me” story. Now, the company has a trailing-12-month dividend yield of 6.62% and a free cash flow yield of 12.75%, making it attractive to those looking to generate passive income. However, shares could fall further or continue to significantly underperform the broader market, so even this play does not come without risk.
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $534,008!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,090,073!*
Now, it’s worth noting Stock Advisor’s total average return is 949% — a market-crushing outperformance compared to 192% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.
Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Centerra Gold (TSX:CG) has been drawing attention after a period of strong share performance, with total return over the past year above 200% and revenue
Investing in growth stocks with strong fundamentals can produce long-term returns that outpace the S&P 500Â (SNPINDEX: ^GSPC). However, some of those same stocks go on sale during market reverses. Growth stocks are usually more affected by headlines and macroeconomic data points than blue chip stocks. Although falling prices can be stressful for investors, it also
Find your next quality investment with Simply Wall St’s easy and powerful screener, trusted by over 7 million individual investors worldwide. Zeon (TSE:4205) has drawn fresh attention after recent share price swings, including a 4.6% decline over the past day and an 11.9% drop over the past week, prompting closer scrutiny from investors. See our
Find your next quality investment with Simply Wall St’s easy and powerful screener, trusted by over 7 million individual investors worldwide. Lumentum Holdings (NasdaqGS:LITE) announced a multiyear agreement with NVIDIA to accelerate advanced optics technologies for next generation AI infrastructure. NVIDIA is making a significant investment in Lumentum as part of the collaboration focused on
Data obtained by CBS News New York Investigates shows a massive increase in pump-and-dump schemes over the last year. It’s a type of stock market scheme that’s emptying bank accounts all over the country. Two traders from New York told reporter Tim McNicholas it cost them tens of thousands of dollars. How pump-and-dump schemes work
The Morning Bull – US Market Morning Update Monday, Mar, 9 2026 US stock futures are pointing lower this morning, with E-mini S&P 500 contracts down about 1.3% and Nasdaq 100 futures off roughly 1.5%, as investors react to a jump in borrowing costs and energy prices. The US 10 year Treasury yield is around
A currency dealer monitors exchange rates in front of a big screen showing South Korea’s benchmark stock index (C) and the Korean won/USD exchange rate (R) in a foreign exchange dealing room at the Hana Bank headquarters in Seoul on April 9, 2025. Jung Yeon-je | Afp | Getty Images South Korea’s Kospi opened more
CNBC’s Jim Cramer said investors should not jump the gun on buying stocks despite Monday’s market turnaround, fueled by President Donald Trump‘s remarks that the Iran war may be nearing an end. During an evening news conference, Trump told reporters in Miami that the U.S. is “achieving major strides toward completing our military objective” in
Posted March 9, 2026 by Ben Carlson Active Trader Report: Use of Leveraged & Inverse ETFs Way Up Direxion partnered with Compound Insights and Vanda to explore what’s driving the evolution of active tradingand how active traders are using leveraged and inverse funds across equities, single stocks, commodities, and volatility. Today’s Talk Your Book is
Today’s Change (40.50%) $6.38 Current Price $22.11 Key Data Points Market Cap $3.6B Day’s Range $20.98 – $23.47 52wk Range $13.74 – $70.43 Volume 6.6M Avg Vol 23M Gross Margin 60.86% Hims & Hers Health (HIMS +40.50%), a direct-to-consumer telehealth platform, closed Monday at $22.15, up 40.72%. The stock moved higher after announcing a collaboration
A pumpjack near Driscoll, Texas, US, on Sunday, March 1, 2026. Eddie Seal | Bloomberg | Getty Images Prediction market bettors are increasingly expecting the U.S. economy to enter a recession this year as oil prices soar. Kalshi’s market for whether the U.S. goes into a recession in 2026 jumped above 34% on Monday —
Jamie Dimon, CEO of JPMorgan Chase (NYSE: JPM), is one of the most respected voices of the financial industry. No CEO has a perfect crystal ball to predict what’s happening next with the economy or stock prices, but when Jamie Dimon talks, people listen. In a recent interview with Bloomberg on March 2, Dimon said
EverForward LLC Las Vegas, Nevada, March 09, 2026 (GLOBE NEWSWIRE) — As financial markets continue to evolve through 2026, the defining challenge for many trading firms is no longer simply identifying opportunity—it is determining when not to trade. Periods of instability have become increasingly structural. Liquidity can thin unexpectedly, correlations shift rapidly across asset classes, and
Howmet Aerospace Inc (NYSE:HMW) is down 0.8% to trade at $248.08, headed for its fourth loss in five sessions. HMW tapped a record high of $267.31 on March 2, but is nursing an overall monthly deficit of over 5%. It might be time to buy the dip though, with the stock flashing a historic bull signal,
March 9, 2026, 10:50 a.m. ET Armchair investors have endured several stomach-churning days in March, with the S&P 500 and Dow Jones averages seesawing in response to the Iran war, surging gas prices and inflation fears. When the stock market falls off a cliff, the natural impulse might be to panic and sell. There’s nothing so worrisome as
Did you know that in just the past five years, Broadcom (NASDAQ: AVGO) stock has soared by more than 630%? The tech company has been a hot buy, and it has routinely outperformed the market. Demand for custom chips has been through the roof as companies invest in artificial intelligence (AI) and build next-gen models,
Investors haven’t had to deal with many deep market corrections over the past two decades. Since the 2008-2009 financial crisis, there was the 2018 mini-bear market that cut about 20% off the S&P 500. But it was back to new highs within several months. The COVID pandemic sparked a bear-market drawdown of more than 30%,
What a difference a calendar year can make. Exchange-traded funds (ETFs) with outsize exposure to growth stocks crushed the S&P 500Â over the past few years. But so far this year, it’s the sectors with heavy assets — such as energy and materials — that are producing the best gains. Mutual fund giant Vanguard offers 65
New York  — Stocks fell and oil prices traded above $100 per barrel Monday as investors grappled with a potential energy crisis caused by the war with Iran. The Dow fell 678 points, or 1.43%. The S&P 500 fell 1.28%, and the Nasdaq Composite sank 1.2%. The Dow and S&P are coming off their worst
In late February 2026, United Parks & Resorts Inc. reported that fourth-quarter 2025 revenue fell to US$373.55 million and net income to US$15.05 million, and in early March it disclosed it would miss the SEC deadline for filing its next 10-K. Despite weaker 2025 results, the company completed several large share repurchase programs totaling hundreds
