PepsiCo (PEP)

They report Thursday. He's impressed by how they've dealt with the rise of GLP-1 drugs and healthy diets among the young. The CEO listens to customers.

 It reports Tuesday. He worries about it because of its snack division which has been struggling against the weight-loss drugs. Shares moved up today.

They report Thursday. They've had it tough lately, but have a strong Frito-Lay snack franchise. Also pays a solid 4% dividend. However, the younger generation is watching their health, and people are taking weight-loss drugs, GLP-1 which diminishes cravings. PEP is -7% this year vs. Coke +7%.

Pays a safe 4% yield. Shares are bottoming now. Own, don't trade.

Remains a premium growth company. Elliott Management just took a big stake, and he likes this activist firm. Shares are 7 points below before Elliott stepped in--a bargain. Also, this yields almost 4% because shares have fallen so much.

It reports Thursday. It trades at a low 17x PE. Headwinds: GLP-1 drugs, RFJ Jr. who despises junk food though embraces junk science, and the desire to stay healthy. It's a tough industry.

He sold in 2024 when the valuation started looking a bit full. When pandemic inflation hit, "elasticity" was low so that consumers kept buying despite higher prices. Cumulative effect of inflation caught up to them. Not tempted, given slowing macro economy and inflation genie not fully back in the bottle.

Operates in a cola duopoly with KO, good job creating shareholder value. He likes market leaders like these that have little to no direct competition, so this name fits that bill. That being said, it's a lot harder these days with consumer brands to establish a brand and build a moat. Today he could launch a cola company online, using Instagram and FB, with very little cost and effort, and with luck it could even go viral. Brands will have a tough time. 

Very strong, well-established brand. PEP got into snacks, which are up against healthier lifestyles. He owns FEVR, take a look at that one.

An amazing company and major soft drinks maker. Shares are far from its last highs, so low that the dividend now pays 4.42%. Suppose RFK Jr. goes after companies that produce caloric snacks? Share are very undervalued, but who knows when shares will stop going down?

Yields 4%, well-run and can start a position at 16x PE. They will right the ship. 

Was just downgraded. The consumer is fed up with shrinking product, like potato chips per bag. Consumer products must take the hit and lower prices like this, which will shrink margins. But it's worth it as opposed to this shrinkage. 

Rallied 2.95% in today's sell-off as people sough safety in stocks that do well in a recession. Pays a 3% dividend.

Historic growth story of Pepsi was the Frito-Lay franchise. Not the growth company it was. Still trades at a reasonably high multiple for its growth rate. International sources of revenue, so the strong USD is a major headwind.

Companies in the snack space have traded off on the fears of GLP-1. Volumes are starting to drop. Growth metrics just don't support the valuations.