Stock Checkup: HJ Heinz (HNZ)

I have one word to describe HJ Heinz's (HNZ) performance in the past few months, WOW!

Since I wrote about it on April 21, 2009, Heinz has done nothing but moved up. You asked "but so have the market". A rising tide raises all boats and although Heinz under performed the Dow by 7%, one should never complain about making less money. Let's review the data.

Fundamentals

My calculation shows Heinz to be a great value around 5% dividend yield.  This placed Heinz at $35 at the time of my article. Fair value estimate is at 3.9% yield or $42. Excluding dividend, that's a 20% upside. Not too bad considering seven months time frame. Fundamentally, the stock has reached its fair value so I would urge you to unload the stock. I sold my holding back in August 5 around $38. If you believe that shares can continue to rise, keep on reading the technical section.

Technicals

This is a text book technical trading stock. After reaching a bottom in March, share rose above 50 day moving average and never turn back. The moving average provided 5 buying opportunities. How long this will last? No one know. The 150 day moving average is still going strong with no sign of turning, another bullish signal. You can assume that if the trend continue, it will go to infinity but that's not going to happen. That is why I recommend selling it and forget about picking the top. If you really want to push it, sell after it fall below 150 day moving average.

P.S.

Cramer recommended it in his next week game plan.

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