Jason Del Vicario PepsiCo PEP-Q HOLD Jun 06, 2025

A great consumer staples company. It's smart that they got into the snacks business, like Frito Lay. But it's a slow-growing, low-margin business. Pays a good dividend, but the valuation doesn't attract him, 15-20% too high.

GLP weight-loss drugs have hurt, and in some countries like India PEP has faced headwinds over their use of water, which is scarce is those places. 

It reports Tuesday. The weight-loss drugs make it hard for PEP to thrive. It pays a 3.6% dividend, though.

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.

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

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. 

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

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?

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.