According to The Wall Street Journal, Campbell Soup (NYSE: CPB) plans on executing a nice buyback program for its stock. The company will repurchase perhaps as much as 10% of its shares over time. Also, earnings will probably come in near the top point of the previously stated range. So, should you rush in and invest in Campbell just because of this buyback?
My opinion: Probably not if you're looking to merely trade the name, but if you're looking to hold for the long term, you'll probably be all right. Although Campbell Soup's stock isn't near a 52-week low as of this writing, I notice that Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), and Kraft (NYSE: KFT) aren't too far from theirs. It's been a crazy time for the markets, and it amazes me that a stock like Coke isn't being perceived as a safe haven. I know there are some reasons out there for its weakness in terms of growth prospects and the like, but still, I've watched it drop quite a bit in very recent times (I own Coke), and I'm a bit surprised at its current price action considering the recession.
So, even though Campbell's buyback is great news for shareholders who already own the stock, I'm not sure I'd initiate a position myself. Although I am looking for stocks to buy, I just haven't been able to ignore the technical damage that's been inflicted upon the big averages by the bears and am reticent at putting new money to work in short-term trades. I think management might be doing the right thing with its buyback from a shareholder standpoint, but from a trading perspective, I would not be buying along with them.
Disclosure: I own Coke; positions can change at any time.
Talk about a tough time in the markets. Between the financial crisis and oil prices rising on an almost daily basis, with the Fed damned if it raises rates and damned if it doesn't, the floods in the Midwest are now threatening to make a trip to the supermarket much more expensive. Yes, break out the coupons and pray for sales, because, according to The Wall Street Journal [subscription], food prices are destined for one direction: higher. That's because a lot of farmland has been damaged, throwing the supply-demand dynamic into chaos.
What does this mean for investors? Look for potential pressure on the stocks of companies such as Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), Kraft (NYSE: KFT), Kellogg (NYSE: K), General Mills (NYSE: GIS), and Hershey (NYSE: HSY). I happen to own Coke, and I've heard the news reports talking about how higher corn prices will affect Coke and Pepsi because they use corn syrup as an ingredient for their sodas. It's also been pointed out by others that PepsiCo owns Frito-Lay, and since that company manufacturers salty snacks such as Doritos and Tostitos (I love them both), corn prices will also have an impact on that division.
If you're a trader, be wary. We might be in for a rough ride this summer with not only the stocks I've mentioned here, but in a general sense. Since I own Coke, I've been acutely aware of the pullback experienced in that stock as the external pressures surround it. As I write this, the stock is trading at $54.27. The shares were over $65 during their wonderful stay at the 52-week-high suite. So, yes, buyers with short-term mentalities must be wary. However, long-term investors should look upon any pullbacks as potential opportunities for some of these food-selling companies. If you don't intend to trade, then adding to a Coke or Pepsi position might make sense.
Disclosure: I own Coke; positions can change at any time.
Klausner Technology Inc, which has sued several companies for damages and future royalties, has settled the suits and reached an agreement Monday with Apple Inc (NASDAQ: AAPL), eBay Inc (NASDAQ: EBAY) and AT&T Inc (NYSE: T) to license its "visual voicemail" technology that sends visual alerts to computers or mobile telephones when a user has a voice message.
Meanwhile, Barron'sTech Trader Daily gave several analysts' assessments of the upcoming 3G iPhone: At RBC, they're expecting "massive" shipments of the phones in Q4; this was supported by an analyst at Deutsche Bank. The Goldman analyst didn't stop there but said he expects improvements in the iPod and Mac business segments as well.
And while Apple is increasing its global foot print, so is Yahoo! Inc. (NASDAQ: YHOO). The internet portal company said on Tuesday that its mobile search service will be offered by six more telecom companies in Asia, bringing the total to 60 partnerships with companies reaching 600 million subscribers. A Yahoo! exec said he expects the mobile advertising market to rise to $16.2 billion in 2011 up from $1.5 billion in 2006 where Yahoo! is well poised to get a large share.
But all is not rosy at Yahoo! to say the least, as is evident by the massive loss of talent. The recent is Yahoo's EVP Jeff Weiner. Yahoo's president Sue Decker has apparently emailed employees following his resignation. TechCrunch has the surprisingly cheerful and positive email.
PepsiCo (NYSE: PEP), major rival of Coca-Cola (NYSE: KO), is letting the investing world know that it's doing fine. In one of the shortest press releases I've ever read, management at the beverage maker let shareholders in on the fact that it intends to reiterate guidance at The Deutsche Bank Global Consumer and Food Retail Conference that takes place next week in Paris. PepsiCo believes it's still good for $3.72 per share in earnings for the fiscal year.
When the world seems to be heading for the dark pits of economic hell, it's nice to know that PepsiCo expects to be able to stay the course and deliver on an earlier forecast. After all, with all this talk of inflation, one would have to wonder how companies like PepsiCo and Coke can possibly remain stable given the difficult input-cost environment. The big question on my mind is how high these two companies might rise during the summer, since they are considered defensive plays. They didn't seem defensive at all on Wednesday during the Dow's 200-point bleed, but my gut is telling me they might be good short-term plays.
They certainly are excellent long-term plays, and while I own Coke, I'll concede that right now, in terms of P/E ratios and dividend yields, an investor wouldn't go wrong with either. And, yes, I'll further concede that one gets an added bonus with PepsiCo since it owns the strong Frito-Lay salty-snack business. But with both stocks down over the last six months (As of this writing, PepsiCo is down more than 11% for the six-month period while Coke is down more than 9%), and with problems in the markets, they might be interesting ideas right now. Again, though, the effect of input costs must be part of your due diligence before buying.
Disclosure: I own shares of Coke; positions can change at any time.
Earnings season is basically over, but there are still some reports out there. On Friday, Wimm-Bill-Dann (NYSE: WBD), a dairy and juice distributor based in Russia, divulged its Q1 earnings stats. Talk about growth across the board. Everything was double-digit appreciation (except for one metric, which I'll get to in just a minute).
Seriously, this is like a picture of perfection in many ways. Net revenues jumped 35%. Gross profit shot up 26%. Operating income soared 23%. Net income on a dollar basis rose 31%. Net income on a diluted basis increased 30% to $0.95 per share. Bravo, Wimm-Bill-Dann!
Now, there's one metric that the company didn't shine on. It can be found in the statement of cash flows. Net cash from operating activities actually declined 45%. Okay, cash flow is one of my favorite metrics, so yes, this decrease isn't a joyous event for me. But this is just the first quarter. The growth rates in the other areas nevertheless inspire confidence in this foreign company. Plus, according to Reuters, this quarterly performance beat expectations.
Common sense suggests if your portfolio doesn't contain a defensive play or two by now, you should add at least one, with the consumer products segment representing a good choice. And with the aforementioned in mind, PepsiCo is worth a review.
PepsiCo, Inc. (NYSE: PEP), or simply Pepsi as it is known in the Concrete Canyon, has all the ingredients for a reasonably safe consumer play: a leading primary brand, product diversification, established market positions, a wide geographical footprint, marketing savvy, and cost discipline.
Pepsi has a large snack business, but the major business model here is, of course, beverages, led by the namesake Pepsi cola, which vies with The Coca Cola Company (NYSE: KO) for cola supremacy, globally. Operating in about 200 countries, look for PEP's international market share to increase in 2008-2009. The company is also well-positioned in the juice and non-carbonated drink segments, which are also expected to perform well, moving forward.
Is there anything cooler than Kool-Aid? Kraft (NYSE: KFT) believes there is, my friends. In fact, Kraft thinks a healthier Kool-Aid is pretty darn hip!
According to this AP article, Kraft wants to position the Kool-Aid brand to health-conscious moms as a beverage that is okay for kids to consume. The food company will be adding vitamin E to one of the Kool-Aid varieties, and it has reformulated its sugar-free lineup to improve the taste. There's also a new Kool-Aid product on the market called Burstin' Waters that is supposed to be relatively healthy.
The company actually has been pretty good about trying to make its products not as junky. As the article states, Kraft introduced an initiative a few years back to create a set of nutritional guidelines that would aid the company in making its portfolio more in tune with the current zeitgeist; indeed, moms everywhere seem to be getting sick of putting sugary, fat-inducing foodstuffs into the stomachs of their kids. Of course, I'm sure kids still get away with eating junk at times (it's like an inalienable right of the youth); for the most part, though, consumer choices are shifting, and woe be the consumer-goods entity that does not respond. Just ask Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP). Those two have been kicking it into high gear when it comes to alternatives to sugary carbonated sodas. Pepsi and Coke now offer all kinds of waters and enhanced beverages; in Pepsi's case, many of its salty-snack products are decidedly healthier. Coke purchased VitaminWater last year, and has been doing well with it. And with vitamins all the rage, Kraft would be smart to really promote the heck out of that vitamin-E addition.
According to an article on Reuters, Coca-Cola (NYSE: KO) is feeling the pressures of the flat domestic marketplace. COO Muhtar Kent, who will soon become the CEO, said in comments at a speaking event in Japan that Coke will be evaluating an acquisition strategy to grow the long-term prospects of its beverage business.
Now, this doesn't mean that a large purchase or merger is on the horizon, but it does mean that shareholders can expect, according to Kent, small, targeted asset buys. He did, however, specifically state that the company isn't giving up on organic growth, either, in its quest to expand its presence in beverages and beat back the ongoing threat of enemy number one, PepsiCo (NYSE: PEP).
He better not be giving up on it. Coke's stock recently retreated from its 52-week high of $65.59 to a price, as of noon today, of $56.37. The stock has done well over the last year, and this could be considered a normal consolidation. However, there has been a lot of buzz lately about Coke's domestic weakness.
Really, the way Hansen Natural Corp. (NASDAQ: HANS) shares are dropping -- down about 14% as I write this and setting a new 52-week low earlier in the session -- you'd think the company reported disastrous results. Not so!
True, Hansen Natural reported Wednesday a lower-than-expected first-quarter profit due to lower profit margins, but the results weren't that bad. For the quarter, the company's net sales rose to $212.2 million and it earned $28.8 million, or 29 cents a share. Analysts, however, expected 35 cents on revenue of $221, according to Thomson Reuters. The thing is, that compared to last year, profit climbed 43% and revenue jumped 28%. It seems that the Monster Energy brand drinks had a lot do with Hansen's revenue growth, especially the new Java Monster dairy-based coffee drink.
The problem? Already in the fourth quarter investors were concerned about decreasing margins, and this quarter as well Hansen said its profit was hurt by higher costs, including a 34% boost in costs of sales and a 15% rise in operating expenses. Talk about margin squeeze.
Yuck! If there's one drink I really dislike it's Dr. Pepper, and yet the company has managed to pick up market share against its largest rivals the past few years. Still, investors are concerned and shares of Dr. Pepper Snapple Group Inc. (NYSE: DPS) received a lukewarm welcome when they began trading today (Wednesday) on the New York Stock Exchange. The company was spun off from under former owner Cadbury Schweppes.
The company has many other brands other than Dr. Pepper and the splashy Snapple, including 7UP, Canada Dry, Schweppes, Mott's, Sunkist and RC Cola. Last year the company's sales totaled $5.7 billion.
No doubt, though, Dr. Pepper will now face the stiff competition from Coca-Cola Co. (NYSE: KO) and PepsiCo (NYSE: PEP), both of which are much larger and have wider portfolios, all on its own. With rising commodity costs, competing against such larger rivals isn't going to be a picnic.
To add to investors' concerns, the company hasn't issued any near-term earnings guidance, making many would-be buyers sit on the sidelines until the now-third-largest beverage company in the U.S. -- with its 15% market share -- has a quarter or two of financial results behind it. Despite giving longer term goals of increasing annual revenue by 3-5% and EPS by 7-9%, it seems that, with the current economic climate, investors want to see actual results before they dive in.
Also, it's no secret that with consumers getting more and more health-conscious, U.S. sales of traditional carbonated soft drinks have fallen in the last few years. The company will to have to adjust and extend its portfolio appropriately if it wants to survive. That, combined with a softening economy and rising costs can only entice me to hold off on this particular stock... at least for now.
DPS shares finished the day up 45 cents, or 1.8%, to $25.50.
News Corp (NYSE: NWS) is scheduled to report earning Wednesday and is estimated to post a profit of 31 cents a share in the fiscal third quarter.
In its attempt to answer consumer demand, Ford Motor Co. (NYSE: F) said Wednesday it plans to greatly increase the use of more fuel-efficient six-speed automatic transmissions. The six-speed automatic transmission, which offers 4-6% better fuel economy, will be in 98% of its North American vehicles by 2012.
Seems that after the recent dealing with Yahoo! Inc. (NASDAQ: YHOO), Microsoft Corp. (NASDAQ: MSFT) Chairman Bill Gates has had enough. He said the company isn't pursuing other deals for now and that Microsoft and Yahoo! should pursue "independent paths." Microsoft still has to show shareholders improvement in Vista and its struggling internet business.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Behold the humble potato chip, snack food of the ages. Claimed to have been invented in 1853 in the road house kitchen of Native American George Crum, the potato chip traveled through American snack history in a class of it's own. That is, until in the early 1960s, when it was discovered that you could grind potatoes into a slurry and then press them back into a consumable form.
I sat down one day with a bag of potato chips from Lay's and with a can of Pringles. Lay's are made by Frito-Lay, a property of PepsiCo Inc. ( NYSE: PEP). Pringles are made by Procter & Gamble Co. (NYSE: PG). I wanted to compare the two in order to assess their similarities and differences. What I found were two very different snacking sensations although both are derived from the same source. The Lay's ingredient list is simple. They're made with potatoes, oil, and salt, with no preservatives added. The Pringles ingredient list begins with the same potatoes, oil, and salt, but the product also contains at least traces of wheat starch and rice flour in addition to a couple common food chemicals.
"Socially Responsible Investing (SRI) is no longer relegated to a tiny corner of the investment landscape; indeed, according to the Social Investment Forum, SRI now accounts for $2.7 trillion, up more than 18% since 2005," says Chuck Carlson.
Here, the editor of The DRIP Investor offers five stock that both rank high for their social responsibility and also stand out based on more traditional earnings and valuation analysis.
"The Social Investment Forum estimates that more than one in every 10 dollars under professional management in the U.S. is involved in SRI investing. What is driving the growth in SRI?
"One factor is the increasing numbers of women and younger investors among the investor populace have fueled demand for SRI investments.
"In addition, we see an increased focus on environment, social, and corporate governance issues. Further, widely publicized stories concerning global warming as well as various corporate governance issues, have caused many investors to reconsider how they deploy their investment capital.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
When it comes to nonalcoholic beverages, there are two that stand out from all the rest. I'm sure you know the names of the companies behind them -- Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP). That's right, it's Coke-versus-Pepsi time! This battle has been waging for a long, long time, and it is as legendary, as ultimate, as the conflict between good and evil. Of course, which one is "good" and which one is "evil" will depend on your taste buds (or, perhaps, the stock you own).
Oddly enough, I'm sort of on both sides. Consider: I own shares in Coke, but when it comes to choosing between Coke and Pepsi, believe it or not, I actually choose the latter! Nothing wrong with that, certainly; after all, you don't invest based solely on what you personally like or don't like. But I will give Pepsi this much -- its soda, simply put, seems a little smoother, a lot sweeter, and it doesn't have an aftertaste. There's something about Coke's flagship beverage that causes a strange taste to linger after its been downed. Maybe it's just me. But, yes, I have to come clean and confess that I do prefer Pepsi over Coke (although, I tell all my friends that Coke is the better-tasting drink, as you can imagine, and promote it whenever the opportunity arises). I should note, though, that all of this is a bit of a moot point, since I mostly eschew sugary soda these days in favor of the dietary counterpart -- on that count, I am most firmly in Coke's camp, as I happily consume Diet Coke exclusively, and cannot stand Diet Pepsi!
According to The Wall Street Journal, Campbell Soup (NYSE: CPB) plans on executing a nice buyback program for its stock. The company will repurchase perhaps as much as 10% of its shares over time. Also, earnings will probably come in near the top point of the previously stated range. So, should you rush in and invest in Campbell just because of this buyback?
Talk about a tough time in the markets. Between the financial crisis and oil prices rising on an almost daily basis, with the Fed damned if it raises rates and damned if it doesn't, the floods in the Midwest are now threatening to make a trip to the supermarket much more expensive. Yes, break out the coupons and pray for sales, because, according to 
According to an 
Yuck! If there's one drink I really dislike it's Dr. Pepper, and yet the company has managed to pick up market share against its largest rivals the past few years. Still, investors are concerned and shares of 
This post is part of our 
This post is part of our 
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