This post is one of six articles on beverage-related stocks. Here are five other investment ideas to sip on.

"PepsiAmericas (NYSE: PAS) is the world's second-largest bottler of PepsiCo beverages," notes Vahan Janjigan, noted quantitative analyst and editor of the industry-leading The Forbes Growth Investor.

"PepsiAmerica's is 44% owned by PepsiCo (NYSE: PEP). Brands licensed from PepsiCo accounted for 90% of 2007 sales. The U.S. was responsible for 70% of first half 2008 sales.

"This territory consists of 19 states mostly in the Midwest. Pepsi, Mountain Dew, and Aquafina are top brands in the U.S. Central and Eastern Europe generated 25% of sales. Markets include Ukraine, Poland, Romania, Hungary, Czech Republic, and Slovakia.

"The U.S.is a mature market with limited growth opportunities and has presented special challenges in recent years as consumers shy away from traditional carbonated soft drinks (CSDs) in favor of non-carbonated soft drinks and energy drinks.

"This evolution has opened the door to boutique beverage companies, allowing them to grab market share from the traditional players.

"More recently, the U.S.has been hampered with a slowing economy. Of course, raw material costs have been soaring everywhere. By raising prices,management has boosted profitability at the expense of sales.

"At the same time, it is investing in growth abroad. It took a 60% stake in Sandora, a juice company in Ukraine, enhancing the company's ability to supply markets in Belarus, Azerbaijan, Russia, and other East European and Central Asian countries.

"Second quarter net sales increased 11.8% to $1.34 billion, with 8.7 percentage points coming from acquisitions. Price increases offset a decline in volume. Higher ingredient costs depressed the gross profit margin by 68 basis points to 40.78%.

"However, strong expense controls boosted the pro forma operating profit margin by 21 basis points to 12.35%. Pro forma net income jumped 21% to $90.9 million or 72 cents per share.

"A weak economy, changing consumer preferences, and competition could hurt sales volumes. Indeed, despite a recent gain in market share for CSDs in the Midwest, management expects U.S.volumes to fall through the second half of 2008. Full-year adjusted revenues should grow 13-14%.

"Earnings should rise 16-18%. Expansion in Europe should support growth through 2010. PepsiCo and CocaCola branded products account for roughly 25% of the highly fragmented beverage market in Central and Eastern Europe. This is a market ripe for consolidation. It provides a rich pipeline of acquisition candidates."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

Beverage stocks are often considered "defensive" in nature. After all, no matter what troubles beset the economy, people continue to eat and drink.

Granted, a recessionary environment might impact purveyors of expensive champagnes. But our focus here is on everyday canned sodas and moderately-priced beer and wine.

Of course, no report on beverages would be complete without the two giants of the field -- Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP).

Chuck Carlson, editor of The DRIP Investor looks at Pepsi and suggests, "Investors should take advantage of the current price lull to do buying in these shares."

... Read the full article on PepsiCo

Meanwhile, Stephen Leeb, editor of The Complete Investor, looks at Coke and is attracted by both its expanding market opportunities and expanding dividend.

... Read the full article on Coca-Cola

Bottling these drinks is also big business and PepsiAmericas (NYSE: PAS) -- the world's second-largest bottler of PepsiCo beverages -- is a recent feature from quantitative analyst Vahan Janjigan, editor of The Forbes Growth Investor.

... Read the full article on PepsiAmericas

Energy drink maker Hansen Natural (NASDAQ: HANS) has caught the eye of Bill Martin. The editor of BullMarket.com finds the stock attractive because the company has recently attracted some hedge fund investors.

... Read the full article on Hansen Natural

In The Forbes International Investment Report, editor John Christy interviews Lou Gerken of Gerken Capital Associates who sees potential in FEMSA (NYSE: FMX), which produces distributes Coca-Cola, Dos Equis, Tecate Beer in Mexico.

... Read the full article on FEMSA

And Nilus Mattive in his Dividend Superstars newsletter, looks to Chilean wine maker, Vina Concha y Toro (NYSE: VCO) as a play for both growth and income investors.

... Read the full article on Vina Concha y Toro

This report is prepared by Steven Halpern's TheStockAdvisors.com which offers a daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

"With its CEO recently buying $10 million of shares, PepsiAmericas Inc. (NYSE: PAS) has to be considered one of the most credible Insider stories in quite some time," notes Jack Adamo.

Here, in his Insiders Plus newsletter, the advisor -- who specializes in assessing situations in which corporate insiders are purchasing stock -- he looks at the world's second-largest Pepsi bottler.

"When I was a kid, a Pepsi was a dime; today, it's about $1.50 for the same size bottle. So, forgive me if I laugh myself silly when analysts say Pepsi bottlers are in trouble due to cost inflation.

"The price of the product has gone up at a compound annual rate of 5.6% per year for 50 years. Is this year going to kill it? I think not. Nor does CEO, Rober Pohlad whose recent purchase was done through a family-owned holding company.

"It was not a huge buy in relation to his holdings -- it increased his stake in the company from 9.6% to 9.9% -- but $10 million is $10 million. Do that a few times, and pretty soon it starts adding up to real money. (Sorry, couldn't resist.)

"The stock has fallen this year from $36 to $26, which is about where he made his recent buys. After a blowout 2007, the company guided down expectations for 2008, citing economic weakness. The stock quickly tanked.

MOST NOTEWORTHY: ConocoPhillips, Ashland and Wynn Resorts were today's noteworthy upgrades:

• Goldman upgraded ConocoPhillips (NYSE: COP) to Buy from Neutral, as they see the stock as inexpensive but views the upgrade "as much about avoiding near-term earnings risk with our pure-play refiners."
  
• Jefferies upgraded shares of Ashland (NYSE: ASH) to Buy from Hold on valuation as they find the risk/reward "intriguing" at current levels.
  
• Bear upgraded Wynn Resorts (NASDAQ: WYNN) to Outperform from Peer Perform citing valuation and Macau operating momentum.

OTHER UPGRADES:

• Photon Dynamics (NASDAQ: PHTN) was raised to overweight from Equal Weight at Lehman.
  
• PepsiAmericas (NYSE: PAS) was upgraded to Neutral from Underweight at HSBC.
  
• JP Morgan upgraded Nordic American Tanker (NYSE: NAT) to Neutral from Underweight.

MOST NOTEWORTHY: Legg Mason, Panacos Pharma and PepsiAmericas were today's noteworthy upgrades:

• Wachovia upgraded Legg Mason (NYSE: LM) to Market Perform from Underperform citing valuation, new CEO change, and reduced Citigroup (NYSE: C) ownership.
  
• Bear upgraded Panacos Pharma (NASDAQ: PANC) to Outperform from Peer Perform citing renewed confidence in Bevirimat, an HIV inhibitor, following analysis of Phase IIb data. The firm expects a partnership for Bevirmat to be the next catalyst.
  
• Deutsche Bank raised PepsiAmericas (NYSE: PAS) to Buy from Hold shares on valuation, as they believe the recent weakness is overdone.

OTHER UPGRADES:

• Fannie Mae (NYSE: FNM) was raised to Equal Weight from Underweight at Morgan Stanley.
  
• Friedman Billings added Great Atlantic & Pacific Tea (NYSE: GAP) to its FBR Top Picks List.
  
• Jabil Circuit (NYSE: JBL) was upgraded to Neutral from Sell at Merrill Lynch.

MOST NOTEWORTHY: Disney, GlaxoSmithKline and Owens Illinois were today's noteworthy upgrades:

• Oppenheimer upgraded shares of Disney (NYSE: DIS) to Outperform from Perform ahead of the company's Q1 results, as they expect in the quarter and find the valuation attractive at current levels.
  
• GlaxoSmithKline (ASE: GSK) was raised to Neutral from Underweight at HSBC on valuation as they believe the dividend yield provides support.
  
• Owens Illinois (NYSE: OI) was upgraded to Buy from Hold at Deutsche Bank following the Q4 upside, as they believe the company is gaining traction with its pricing initiatives.

OTHER UPGRADES:

• PepsiAmericas (NYSE: PAS) was upgraded to Peer Perform from Underperform at Bear Stearns.
  
• Goldman added Simon Property (NYSE: SPG) to its Conviction Buy List.
  
• Jefferies upgraded Infinera (NASDAQ: INFN) to Buy from Hold.

MOST NOTEWORTHY: STMicroelectronics, Biogen Idec, American Community Bank and Crosstex Energy were today's notable downgrades:

• Lehman downgraded STMicroelectronics (NYSE: STM) to Underweight from Overweight, as they expect the company to underperform its peers.
• UBS downgraded Biogen Idec Inc (NASDAQ: BIIB) to Sell from Neutral, citing valuation and their belief that there would be no significant premium if the company was bought.
• American Community Bancshares (NASDAQ: ACBA) was downgraded to Hold from Buy at Stifel, based on valuation.
• Goldman Sachs downgraded Crosstex Energy Inc (NASDAQ: XTXI) to Neutral from Buy, citing valuation.

OTHER DOWNGRADES:

• PepsiAmericas Inc (NYSE: PAS) was downgraded to Underweight from Neutral by HSBC.
  
• Amodcs Ltd (NYSE: DOX) was removed from the Conviction Buy List by Goldman Sachs.
  
• Citigroup assumed coverage of Tenneco Inc (NYSE: TEN) with a Sell from a Hold.
  
• Morgan Stanley downgraded LDK Solar (NYSE: LDK) to Equal Weight from Overweight.

MOST NOTEWORTHY: The U.S. beverage sector, ImClone, Starwood Hotels and Marriott International were today's noteworthy upgrades:

• Goldman Sachs upgraded the U.S. beverage sector, including Coca-Cola (NYSE: KO), Molson Coors Brewing Company (NYSE: TAP), Anheuser Busch Companies (NYSE: BUD), PepsiAmericas Inc (NYSE: PAS) and Coca-Cola Enterprises (NYSE: CCE) to Attractive from Neutral. The firm cited expectations for a stronger 2008, benign commodity cost outlook, better than expected US beer demand, and valuations. Goldman upgraded shares of PepsiCo Inc (NYSE: PEP) to Buy from Neutral citing valuation and improving industry fundamentals.
  
• Bear Stearns upgraded ImClone (NASDAQ: IMCL) to Outperform from Peer Perform citing positive Flex trial results and the new market opportunity for Erbitux.
• Thomas Weisel upgraded Starwood Hotels (NYSE: HOT) and Marriott International (NYSE: MAR) to Market Weight from Underweight based on healthy August trends, credit market may ease concerns over supply growth, and valuations.

OTHER UPGRADES:

• Thornburg Mortgage (NYSE: TMA) was upgraded to Buy from Neutral at UBS.
• Western Digital Corp (NYSE: WDC) was upgraded to Outperform from Peer Perform at Bear Stearns.
• KeyBanc raised Ruby Tuesday (NYSE: RT) to Hold from Underweight.
• Take-Two Interactive Software (NASDAQ: TTWO) was upped to Buy from Hold at Gabelli.

Pepsico, Inc. (NYSE: PEP) is higher this morning as PepsiAmericas (NYSE: PAS), the largest Pepsi bottler, announced today that it has completed the purchase of Agrima JSC, which bottles PepsiCo Inc. drinks in Bulgaria.

The stock has been volatile (for PEP) within an 8-point range over the past six months, hitting a one-year high of $70.25 in August. PEP opened this morning at $68.34. So far today the stock has hit a low of $68.17 and a high of $68.90. As of 11:15, PEP is trading at $68.74, up $0.71 (1.0%). The chart for PEP looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $62.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just 7 weeks as long as PEP is above $62.50 at October expiration. Pepsi would have to fall by more than 9% before we would start to lose money.

PEP hasn't been below $62.50 since November and has shown support around $67 recently. This trade could be risky if the company's earnings (due on 10/11) disappoint, but even if that happens, this position could be protected by multiple levels of support between $64 and $67, plus the stock's 200 day moving average, which is around $65 and rising.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in PEP or PAS.

MOST NOTEWORTHY: SanDisk (SNDK), Business Objects (BOBJ) and the Beverage Sector top today's list of downgrades.

• SanDisk Corp. (NASDAQ:SNDK) was downgraded to Neutral from Buy at UBS, citing expectations for an oversupply of flash memory in 2006 and 2007.
• Business Objects (NASDAQ:BOBJ) was downgraded to Sector Perform from Outperform at Pacific Crest, citing valuation concerns and increasing competition from Oracle (ORCL), Microsoft (MSFT) and open source competitors.
• The Beverage Sector was downgraded to Cautious from Neutral at Goldman Sachs. The firm cited declining demand in core categories, raw material inflation and valuation.
  • Goldman downgraded PepsiAmericas, Inc. (NYSE:PAS) and Coca-Cola Enterprises, Inc. (NYSE:CCE) to Sell from Neutral
  • while COTT Corp (NYSE:COT) was added to their Conviction Sell List.

OTHER DOWNGRADES:

• Kevin Dann & Partners downgraded shares of Pep Boys (NYSE:PBY) to Hold from Buy on valuation and the lack of near-term catalysts.
• Thomas Weisel downgraded Ikanos Comm (NASDAQ:IKAN) to Peer Perform from Outperform citing a slowdown of VDSL deployments in Japan due to persisting inventory build at NTT.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).