"Pepsi Bottling Group (NYSE: PBG), is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages, with annual sales of nearly $13 billion," says David Fried, a long-standing specialist in companies engaged in corporate repurchases.

The editor of The Buyback Letter, "Pepsi Bottling has gobbled up its own shares, reducing shares outstanding by 5.2% in the past 12 months." Here is his review.

"What is a Pepsi Bottling Group beverage, besides Pepsi? A better question might be what isn't, since Mountain Dew, Sierra Mist, Aquafina, Tropicana, Mug Root Beer, Lipton, SoBe, Starbucks Frappuccino, Dole, 7UP, KAS, Aqua Minerale, Mirinda, Manzanita Sol, Dr Pepper, Squirt, Electropura, e-pura, and Garci Crespo, among
others, are all part of the PBG drink portfolio.

David Fried has developed an industry-leading reputation by focusing on companies buying back their shares. Here, his Buyback Letter looks at EnCana Corp. (NYSE: ECA).

"Canadian oil producer EnCana is among the largest holders of oil and gas resource lands in onshore North America, has an extensive drilling inventory with some 40,000 well locations, strong production and reserves growth, and robust project returns. It is focused on natural gas and in-situ oil sands.

"As the dangers of global warming have become more apparent, major energy companies are attempting to capture carbon dioxide and lock it away where it won't trap more heat. Industry leader EnCana has embarked on a pilot project to improve recovery rates from mature oil wells by using carbon dioxide.

"EnCana buys carbon dioxide produced by a power plant and ships it via pipeline to its Weyburn field in southern Saskatchewan. EnCana injects the gas into its oil field, where it reduces the viscosity of the oil, allowing the company to increase its recovery from the field.

David Fried specializes in finding fundamentally strong companies that are also buying back their shares. A recent buy in his The Buyback Letter is defense contractor, Alliant TechSystems (NYSE: ATK)

He explains, "Alliant is a $3.9 billion advanced weapon and space systems company employing some 16,500 people in 21 states. It supplies aerospace and defense products to the U.S. government, allied nations, and prime contractors in the U.S."

Alliant, he notes, recently received a $62.5 million contract from Orbital Sciences Corporation for the main abort motor of the NASA Orion crew exploration vehicle Launch Abort System (LAS).

In addition, he points out that NASA's Orion will succeed the Space Shuttle in transporting humans to and from the International Space Station, as well as carrying crews to the Moon and eventually Mars. In late June, Fried adds, ATK received a contract worth more than $5 million to make rocket motors for the Sidewinder air-to-air missile system.

For his latest recommendation, buyback specialist David Fried is following Carlos Slim – who just past Bill Gates to be the world's richest man.

Telefonos de Mexico (NYSE: TMX), majority controlled by Slim, is the latest buy from The Buyback Letter.

Based in Mexico City, Telmex, as it is commonly called, controls more than 95% of Mexico's fixed-line telephone market and is a major provider of long-distance services, notes Fried. Telefonos de Mexico, he sates, is the leading telecommunications company in Mexico, with more than 15 million telephone lines in service and more than 1 million Internet access accounts.

Fried explains, "It is currently positioned as the regional market leader in telecommunications, and in recent years has bought telephone, cable and data transmission assets in Argentina, Brazil, Chile, Colombia and Peru.

Formerly owned by the Mexican government, the advisor notes, Telmex was privatized in 1990 and is now majority controlled by billionaire magnate Carlos Slim, the world's third richest man.

Says Fried, "Slim is quite a character, and aside from the sheer magnitude of his $49 billion fortune, he also gained the most wealth in the last year ($19 billion). Slim has also invested in cigarettes, real estate, soda bottling, auto parts, and insurance, and, of course, made a fortune in telecom."

He continues, "Slim also is branching out to other countries. In 2005, Telmex spent $350 million to acquire the majority stake in Colombia's biggest phone company, and bought Chilean mobile telecom Smartcom for $472 million."

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By focusing on stocks that are buying back their own shares, David Fried has developed a model portfolio that has gained 184% since inception in August 2000, versus a loss of 1.2% in the S&P 500 over the same time period.

In his The Buyback Letter, he looks at two of his newest holdings, both of which are American icons – Harley-Davidson (NYSE: HOG) and Mattel (NYSE: MAT).

In addition to having one of the most recognizable brand names in the world, he notes Harley-Davidson's less-recognized but equally strong asset is its Harley Owners Group -- or H.O.G. - with over 1 million members around the globe. Further, he notes, even those who can't or don't ride Harley's still own the accessories, collectibles and sport the Harley brand clothing.

Fried explains, "With two decades of uninterrupted growth, year 2006 looked breezy. Revenue for the full year was $5.80 billion, an 8.6% increase. Net income for the year was $1.04 billion, an 8.7% increase. During the most recent 10-year period, compound annual growth rates for revenue and earnings have been better than 14% and 24%, respectively."

Even more important that its increasing sales, Fried notes that the company continues to return value to its shareholders, pointing to a 22.5% increase in dividends and the repurchase of 19.3 million shares last year. In fact, he notes, the company has reduced its amount of outstanding shares buy 5.6% over the past 12 months.

With growth forecasted in the range of 11%–17% a year through 2009, Fried says, "To us, Harley-Davidson looks like it still has room to run."

Also new to Fried's buy list is another "American icon" -- Mattel, the largest toymaker in the world. The advisor notes, "At 50 years old, Barbie has had her ups and downs (haven't we all!), but she is still going strong as the most popular fashion doll ever introduced."

Indeed, he points out, Barbie sales were up 43% in 2006, spurred by new products such as a new electronic version that can dance as well as a new Barbie head with hair that can be styled. Fried jests, "Barbie survived her very public breakup with Ken a few years ago...there is no doubt she will bounce back as she reinvents herself."

Meanwhile, the advisor points out that Mattel is about more than Barbie, pointing to such best-selling brands as TMX Elmo, Hot Wheels, Matchbox, and the Fisher-Price lines.

In addition, he notes, this past summer Mattel began selling 'Cars' branded toys, based on characters from the popular animated Disney film. The third quarter also was the third consecutive quarter that domestic Barbie sales rose.

Finally, he is attracted to the stock by the fact that the company has has reduced its shares outstanding by 5.5% in the last 12 months.

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