I can’t take it anymore. I’ve been watching this stock get cheaper and cheaper, and with this recent sell of it’s time to make the move. This company is not growing, but it’s also not going anywhere. How do I know? Well, are you planning or know anyone that is planning to stop using Heinz ketchup? I didn’t think so.

Imagine collecting 5.88% dividend yield on Kraft Heinz with a payout ratio of only 29%. Not only that, but the price to book ratio is only .79 with a forward PE ratio of 11.40. Wow. This company is cheap.

Back in early 2018 the stock was almost $100 a share, today it closed at $43.29. The stock has been cut in half in a short a mount of time.

I’d like to say I’m calling the bottom here on $KHC, but I don’t know. We do have a weekly hammer forming on the candle stick charts which is encouraging, but we could still see this stock to continue to sell off.

I do think we have reached a point where we have little risk compared to our potential reward.

Yes, the company has gathered up a lot of debt on it’s balance sheet since 2014. It has a interest coverage of 4.75, which I’d much rather prefer something higher. The company has been taking on debt to try and fuel growth. Recently it just bought out ‘Primal Kitchen’ as trends continue for organic and higher quality food items.

So, are these the right moves? The stock market doesn’t really think so, but it’s hard to say. Campbell’s soups have also been trying to make similar plays adding debt to their balance sheet as well.

Right now, it doesn’t seem to be working, but these types of moves will take time. We likely won’t know for a couple of years if these types of accusations work out.

I do believe the sell off is getting exhausted. I also believe Kraft Heinz will be around for generations to come. So with that, lets buy now.

I will be along for the ride and will buy this stock myself. Entering in 12/27/2018 in the Tao Tracker as the purchase date.

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We hit our stop loss for SJM. Using a stop loss is a rule we use to protect capital. It’s not fun, but it REALLY helps with training our investing discipline and protecting capital.

Consumer staple stocks have been selling off which seems to be the trend in motion. Campbells Soup reported earnings last week which where way below expectations and the CEO left the company which appears to be dragging down the rest of the sector.

I believe consumer staple stocks will have their day in the sun again when they figure out to reduce their costs and revamp their brand names.

We are going to obey our stop loss and sell SJM. We held it for over 200 days and are selling at a 2% gain not including dividends.

I will be watching the consumer staples for any signs of life as there will likely be a great moment to get back in a position.

For now, please sell SJM.by

Coming at you today with a new pick. So far all of our positions are holding up just fine, even after the market correction and increased volatility.

A quick glimpse in the Tao Stock Tracker will show you that we are still up on all over positions not including dividends. We also still have a wide margin from hitting our trailing stops.

Lets add to our portfolio today with a micro-cap closed ended fund that is heavy on industrial stocks.

Royce Micro-Cap Trust, Inc. is a closed-end diversified investment company whose shares of Common Stock ($RMT) are listed and traded on the New York Stock Exchange. The Fund’s investment goal is long-term capital growth, which it seeks by investing primarily in equity securities of companies that, at the time of investment, have market capitalization of $1 billion or less.

As you can see below, the stock is in a upward channel just below it’s 50-day moving average. I expect the fund to continue trading this way for some time.

If the U.S. does get a infrastructure bill passed these smaller industrial stocks could see a lot of action. They are also no doubt benefiting from the reduced corporate tax rate to 21% from 35%.

The fund has a yield of 8.5% and is also trading below its net asset value.

As a benchmark the fund more often than not beats the Russell 2000 index.

You can see in detail how the fund is weighted by industry and it’s heaviest wieghted positions in the following link:

https://www.roycefunds.com/funds/royce-micro-cap-trust/

Recommendation: Buy the Royce Micro-Cap Trust, Inc. closed ended fund (RMT) today 02/21/2018. Our stock tracker is using a 25% trailing stop loss as a sell rule.
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