Investors Buying Kraft (KFT) as Buffett Pounds the Table

Investors are buying shares of Kraft (NYSE: KFT) today following Warren Buffett's op-ed piece in the New York Time's entitled "Buy American. I Am." Buffett is currently the largest shareholder in Kraft, holding more than 138 million shares, or about 9.39%, of the company. The next largest shareholder of Kraft only holds a 4.1% stake in the company. Kraft is currently Berkshire Hathaway's fourth largest position.

In his article, the legendary value-investor pounds the table on US stocks, saying he has recently been buying stocks for his personal account, ie. nothing related to Berkshire Hathaway. Interestingly, Buffett said this account previously only had US government bonds in it. Buffett also said that if "prices keep looking attractive, my non-Berkshire net worth will soon be 100% in US equities."

As Buffett has built-up, to say the least, a convicted stake in Kraft, investors may be buying the stock today in order to make the same bet as the Buffett. Shares of Kraft are currently up nearly 7% to $29.35. Notably, the stock hit a new 52-week low on Friday of last week, trading as low as $25.26. Since then, shares of Kraft are up more than 15%.

Additionally, Merrill Lynch upgraded Kraft this morning from Hold to Buy, saying they see low-teens EPS growth in 2009 and better-than-expected progress on its turn-around plan.

Kraft Foods, Inc., together with its subsidiaries, engages in the manufacture and marketing of packaged foods and beverages worldwide.

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