Forget the mantra about Pepsi's North American market's beverage and snack revenue being hurt, yada yada.I'm Reiterating my Buy rating for PepsiCo, Inc. (NYSE: PEP) first recommended on March 13, 2009 at a price of $48.62.
aquafina posts
FeedPepsi remains the choice of a new generation
Forget the mantra about Pepsi's North American market's beverage and snack revenue being hurt, yada yada.I'm Reiterating my Buy rating for PepsiCo, Inc. (NYSE: PEP) first recommended on March 13, 2009 at a price of $48.62.
Continue reading Pepsi remains the choice of a new generation
Wal-Mart no longer a friend of Dasani water?
I hope the following article out on Reuters isn't wholly accurate. I can see the logic of what's being reported, however. According to the item, Wal-Mart Stores, Inc. (NYSE: WMT) could be reducing the valuable real estate in its stores that is devoted to bottled water from popular brands. This includes The Coca-Cola Company's (NYSE: KO) Dasani and PepsiCo, Inc.'s (NYSE: PEP) Aquafina. This observation is being sourced to analyst Bill Pecoriello of ConsumerEdge Research. He believes that Wal-Mart might be trying to focus on the value consumer by offering more shelf space to generic brands.
Continue reading Wal-Mart no longer a friend of Dasani water?
Pepsi is still the choice of a new generation
Yes, you'd call this a selective market: select the wrong stock, and there's a 30-40% haircut up ahead. Select the correct stock, and you're positioned for the recovery with modest downside exposure. And with that in mind, PepsiCo, Inc. (NYSE: PEP) is worth a review.The financial crisis and pronounced U.S. recession that has seen U.S. stock markets slide about 50% has not been kind to Pepsi, and that's part of the appeal here. Institutional investors punished shares from the $75-range in September 2008 to about $45.40 before bouncing, and they're in the $47-50 range now.
Continue reading Pepsi is still the choice of a new generation
Pepsi will change the Aquafina water label -- a first, small step
PepsiCo Inc. (NYSE: PEP) has decided to change the label on its Aquafina bottled water. From now on it will say "Public Water Source," meaning, basically, tap water -- filtered tap water, but tap water nonetheless. I not only salute the label change but also the fact that Pepsi and The Coca Cola Co. (NYSE: KO) aren't bent on destroying natural springs. They are still, of course, selling us loads of bottles that will need to be discarded later.
I am not the first to speak out against bottled water as a prime example of an industry that has completely "invented" a public need and managed to push it successfully. The result? Depletion of natural springs, huge amounts of bottles added to the already massive quantities of garbage we produce, energy wasted on production and shipping, and increased corporate control over a basic resource -- water. Not to mention the morality of the issue: 2.6 billion cases of bottled water sold in 2006 while people in some parts of the world don't have access to clean water.
But a movement away from this has begun, and hopefully it will slowly make a difference. Only recently, San Francisco's mayor "signed an executive order banning the use of city funds for the purchase of single-serving water bottles." Many restaurants, including Mario Batalli's, will serve only filtered water, not bottled water, even though it is more lucrative. Reuters quotes the industry newsletter as saying that it's more about convenience than health or taste. Well, then, I guess John Sicher, the newsletter's publisher, never heard of empty bottles one can fill with ... tap water.
What to do now? Despite all my objections, this unnecessary industry that has sprung into a multi-billion dollar sector, now has many jobs on the line if it is threatened. I don't doubt that a change is needed, but it can be gradual. Telling people that they're drinking tap water may be the first, small as it is, step into changing consumer perception. As for Pepsi and Coke, I'm sure they'll manage.
I am not the first to speak out against bottled water as a prime example of an industry that has completely "invented" a public need and managed to push it successfully. The result? Depletion of natural springs, huge amounts of bottles added to the already massive quantities of garbage we produce, energy wasted on production and shipping, and increased corporate control over a basic resource -- water. Not to mention the morality of the issue: 2.6 billion cases of bottled water sold in 2006 while people in some parts of the world don't have access to clean water.
But a movement away from this has begun, and hopefully it will slowly make a difference. Only recently, San Francisco's mayor "signed an executive order banning the use of city funds for the purchase of single-serving water bottles." Many restaurants, including Mario Batalli's, will serve only filtered water, not bottled water, even though it is more lucrative. Reuters quotes the industry newsletter as saying that it's more about convenience than health or taste. Well, then, I guess John Sicher, the newsletter's publisher, never heard of empty bottles one can fill with ... tap water.
What to do now? Despite all my objections, this unnecessary industry that has sprung into a multi-billion dollar sector, now has many jobs on the line if it is threatened. I don't doubt that a change is needed, but it can be gradual. Telling people that they're drinking tap water may be the first, small as it is, step into changing consumer perception. As for Pepsi and Coke, I'm sure they'll manage.
Coke, Pepsi thirst for profits from bottled water
Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (NYSE: PEP), which are betting that people's thirst for bottled water will continue to grow, would probably prefer that the public ignore an experiment that Penn and Teller did on their Showtime series a few years ago.
Using hidden cameras, the magicians videotaped unsuspecting people at a restaurant who were being served glasses of what they thought were expensive bottled water by a steward. What they didn't know was that their beverage came from a hose. The program is called "Penn and Teller [explicative deleted]," which is exactly how I feel about the bottled water business.
The hype around popular brands, including Vitaminwater, whose corporate parent Glaceau Coke recently agreed to buy for $4.2 billion, fizzes upon closer inspection.
While there are people with bad water and unsafe water, most Americans have perfectly fine water coming out of their taps. In fact, as FastCompany points out, the two leading brands, Pepsi's Aquafina and Coke's Dasani, are purified municipal water. The Natural Resources Defense Council and other experts have repeatedly pointed out that bottled water isn't as strictly regulated as tap water. An NRDC study actually found that 33% of the waters it tested "violated an enforceable state standard or exceeded microbiological-purity guidelines, or both, in at least one sample."
"There are very few differences between the health benefits of bottled and tap water except in isolated circumstances," said Greg Kail, a spokesman for the American Water Works Association, a trade group representing operators of water systems, in an interview. "In North America, we all enjoy some of the safest drinking water in the world."
Continue reading Coke, Pepsi thirst for profits from bottled water
Preview: PepsiCo earnings report should be a quencher
PepsiCo is scheduled to give its Q4 earnings review via live webcast on Thursday February 8, 2007. The PepsiCo website states that "the live webcast will be accessible through PepsiCo's website at http://www.pepsico.com, and will be archived for replay at the same website for a period of 14 days."
Based on estimates which PepsiCo, Inc. (NYSE:PEP) reaffirmed on October 20, 2006 in this press announcement, PepsiCo is expecting EPS of at least $3.31 prior to the effects of a completed tax settlement and a fourth quarter restructuring of manufacturing flow. PepsiCo states that core EPS should be at least $2.98. I'm expecting a penny or two more. The general consensus on investment blogs and message boards is that PepsiCo is doing well and will continue to do so. There's even some dialog about a stock split if PepsiCo reaches and holds $70 a share.
For third quarter 2006 PepsiCo had an impressive gain of 73% in EPS over the previous year but that was due in part to tax effects involved in the repatriation of cash in the year 2005. PepsiCo stated; "Excluding the impact of the prior year tax charge, EPS increased 12%.
An item of very significant interest is the fact that PepsiCo now offers a direct stock purchase plan via The Bank of New York. For as little as $260 you may now open an investment account and purchase PepsiCo shares. After your initial investment you may then add funds in increments as small as $50, and you may even set up your account for automatic monthly deposits. The fees associated with the Pepsico direct share purchase plan are almost non-existent. Review the purchase plan booklet I've linked to. I think you'll be pleased. They, with the assistance of Bank of New York, have made it very easy and inexpensive for you to become a share holder of the company. It's a situation which I myself plan to become involved with.
Playing into my declaration that water is a word for investors to watch for this year, PepsiCo will be pushing a new variation on its Aquafina brand. Aquafina Alive is a vitamin and flavor enhanced water which will be available in three flavor combinations.
Gary E. Sattler intends to take a position in Pepsico this year.
Also check out some other earnings reports that we're following, and let us know what you're expecting.
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