PEP

PepsiCo Reports Mixed Results But International Business Remains Strong

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Food and beverage giant PepsiCo (click ticker for report: ) reported mixed third-quarter results Wednesday morning. Revenue fell 5% year-over-year to $16.7 billion, which was a bit worse than consensus expectations. However, earnings on an adjusted basis fell only 4% to $1.20, which was a few cents better than consensus estimates. After excluding some divestitures and refranchising agreements, organic revenue increased 5% year-over-year, driven by 1% volume growth and 4% pricing growth. The company’s ability to generate cash continues to impress, as operating cash flow year-to-date registered $5.1 billion. We were also excited to see broad-based strength across its portfolio, especially internationally. For one, Latin American Foods revenues surged 13% on the back of strong pricing and volume gains. Though operating profit … Read more

Coca-Cola Continues to Grow Steadily

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Global beverage giant Coca-Cola (click ticker for report: ) reported solid third-quarter results Tuesday morning. The soda giant saw revenues increase 1% (6% currency neutral) year-over-year to $12.3 billion, roughly in-line with consensus expectations. Comparable earnings fell 2% year-over-year to $0.51 per share, also in-line with consensus estimates. Not surprisingly, North America remained relatively strong, with volumes growing 2% year-over-year during the quarter and revenues up 5% year-over-year. With obesity backlash en vogue, the segment leaders included Coke Zero (up 9%), Seagram (up 11%), juices (up 6%), and Powerade, which grew 9%. We expect these trends to continue, and we wouldn’t be too shocked to see Coke Zero eventually become one of Coca-Cola’s top North American products, in the realm … Read more

Which Sectors Are Leading the Market Higher? And Why Is This Important?

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Missed the ’13 Most Important Steps to Understand the Stock Market’? Click here. Demand academic evidence regarding the efficacy of the Valuentum process? Click here. Tobias J. Moskowitz and Mark Grinblatt documented the “strong and prevalent momentum effect in industry components of stock returns which accounts for much of the individual stock momentum anomaly” in their scholarly article published in the Journal of Finance, ‘Do Industries Explain Momentum’ (download here; stable link here; updated by Fraulo and Nguyen here). Moskowitz and Grinblatt also concluded that “industry momentum investment strategies, which buy stocks from past winning industries and sell stocks from past losing industries, appear highly profitable.” Such findings are consistent with the ‘Case for the Valuentum Style of Investing,’ and … Read more