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Shares of Kraft Foods jumped 41,80 %

29.03.2015 22:09 (London time)
The deal between Heinz and Kraft Foods creates the third largest food company in North America and fifth largest in the world. At PTA Trading Floor we have fully utilized the situation to our benefit and earned the profit.

 

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On Wednesday, the company H.-J. Heinz partially financed by Warren Buffett, who needs no further introduction, announced that it will buy Kraft Foods Group, whose shares on the same day jumped sharply up by 35%. Bloomberg reported that after this agreement Heinz will hold 51% and Kraft the remaining 49%. We have bought Kraft Foods at the PTA Trading Floor two days prior to this news.

From the history of merging companies we know that the company being bought (ie Kraft Foods) by a stronger company (ie Heinz), tends to grow. Shares of the smaller company move more quickly up as a result of mergers and aquisitions. However, Kraft Foods is quite a big company, and this strategy is much more profitable in companies with small market capitalization. If a small company has an attractive product, goods or service and a large company aquires it, shares of a small cap company may dramatically appreciate up to several 100%. In order for you to utilize this strategy, you have to diversify into many small companies from potential sector that can lead to mergers or aquisitions. Surely, we would not risk all capital in one small company.

We have bought Kraft Foods (KRFT) after our analysis on the 23rd of March, 2015 at 62.26. An important part in the purchase plan plays the risk management. Position sizing has been set so our risk is not more than 1% of our account. You can learn how to properly adjust the risk and trading approach in our individual service PTA Personal Mentor. As Kraft Foods is a large company we believe that the potential for further short to medium-term growth could be the very limited from now on. If the Kraft Foods were a small company, we would continue on keeping it longer. Therefore, we have closed our trade after four days at the price of 88.31 and by this we have credited 5731 USD (26.05 points ie +9,3%  to our account in our model portfolio PTA Trading Floor.

 

If you wish to be informed about similar opportunities, become a member of the PTA Trading Floor. You will get information about our trades and you will learn how to approach trading and investing. You will start deciding successfully and prudently and in addition you save more than 3-5 years time in building your quality trading system. At PTA Trading Floor we have generated the profit of over 96% in less than three years. Become a part of a team of traders and investors and start to appreciate your capital!

 


Disclaimer:

This report is not a business tip or trading advice or recommendation. The purpose of this Signal (Report) is educative and informative so you can gain knowledge and experience. This serves only as an example as how trades or investments work in reality. One learns quickly from a real life situations therefore PEVONI - Trading Academy (PTA) does not teach from trades and charts that happened in the past, rather on actual real life examples. Trading tips shown to clients shall not be considered as a trading advice or a recommendation to buy or hold any investment instrument. If there is any motivation to enter such trade, Pevoni Trading Academy (PTA) or it's representatives are not responsible for results. You are fully responsible for  trading and investing decisions regardless of sources, beliefs, motives and motivations. Trading or investing contains substantial risk and only risk capital should be used for trading. Past performance is not necessarily indicative of future results.

PEVONI - Trading Academy (PTA) shall not be held responsible for any errors or inaccuracies in the text. PTA is not responsible for any losses resulting from the information presented hereby either via our websites or any other sources. All reports and services offered by PTA are intended for educational and informational purposes only. The intention of PTA signals is to educate and bring more experience into your trading or investing. Knowledge together with experience provides the basis for thoughtful and prudent business and investment decisions.

PEVONI - Trading Academy is not responsible for the accuracy of translation or the information contained herein. We deem our information sources credible. Author is responsible for the veracity of the information.

 

Author: Lubos Snirc (translation: Roman Krska)

This message is only educational in nature and should not be considered as an invitation or recommendation to buy, sell or hold any investment instrument. The results of the previous period does not represent a guarantee for future development. Trading or investing in financial markets is risky. The possibility of loss is evident, cannot be excluded and every trade is associated with some risk. Before deciding to invest, please read Risk Disclosure and Legal Notice and most of all get ready through education.

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