"Recently, PepsiCo has taken another major step forward with the pending acquisition of its two primary bottlers -- Pepsi Bottling Group and PepsiAmericas.

"The acquisition provides the potential to eliminate an estimated $500 million to $1 billion in redundant costs. If those cost savings are transferred directly to the bottom line, shareholders could see a significant increase in net income of 10% to 20%.

"Of perhaps even greater benefit, the purchase brings 80% of North American beverage distribution 'in-house.' This move will bring management one step closer to its final customers -- injecting a level of flexibility into operations not often seen with a company of PepsiCo's size.

"The acquisition further ties together the Pepsi story -- a well run company with market leading growth positions and an attractive valuation. The executive suite neatly combines the beverage 'megabrands' with the world's largest snack food company, Frito-Lay.

"Management then leverages these brands into international growth markets such as Latin America and Asia where sales volume increased more than 20% in 2008 and, despite the most challenging world economy in decades, has seen high single-digit growth so far in 2009.

"On top of all this, PepsiCo is currently trading at valuation levels not seen in 20 years. And although it's a growth company, PepsiCo still offers the dividend yield (3.1%) of a stalwart.

"Bottom line, PepsiCo remains underrated by the market in general, and the bottler acquisition only enhances the company's outlook. We remain excited about this stock and the future appreciation potential."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.