Either PEP is going to pop hard here, or they are going to be calling me any day now, asking me to come back to Frito to help generate some sales increases. LOL I have no idea why this stock is so weak right now. So much for my "seasonal" scenario.
Dr. Lets try in part to accept and recognize in this stagnant market, i.e. pop sales, Pep's big new product, Pepsi - Blue is a terrible blunder. As I have argued before when you put your frachise name on a product and it is a bust, you hurt your franchise.
As much as I, a Pep shareholder, don't it, that's the fact. And in a down market, mistakes are even more costly.
Instead of growing between 10 and 15 percent, I predict that Pepsi Blunder will actually cause growth to slow to between 1 and 3 percent. KO, on the other hand with the kick from Vanilla Coke could see double digit growth although that could be reaching.
You wrote, "Instead of growing between 10 and 15 percent, I predict that Pepsi Blunder will actually cause growth to slow to between 1 and 3 percent. "
Do you honestly believe that one brand will cause a potential double-digit loss in earnings growth?????? PEP's EBIT was over $3 billion last year. 15% earnings growth would equate to $450 million. Thus, you are stating that that Pepsi Blue is potentially a $420 million snafu?
In addition, keep in mind that the soft drink division accounts for less than 30% of earnings. I'm sorry, unless I misunderstood your statement, the math will never support your assertion. Pepsi Blue is a tiny, tiny brand in a huge stable of leading brands for PepsiCo. Take off those Pepsi-blue colored glasses!
Doc, we agree. PEP's technicals (specifically it's P/E and PEG) are better than both KO's and BUD's. Yet PEP's volume today was higher than average with a lower price. While the volume on both KO and BUD was less than average with increased prices today.
Could be some dumping by a large fund to rebalance, raise cash, or whatever.
My take is that most stocks including PEP, are still overvalued on a P/E basis using historical standards.
The chart is really ugly, with major support at about 30. Hopefully, we won't go that low, however, we may do so along with other stocks in this current market. :-(
Notwithstanding our reasoned view, we will continue to remain long on PEP.