PepsiCo (PEP-Q)

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.

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

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. 

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.

Before they reported early yesterday, several analysts were downgrading it, based on lowering organic growth forecasts, concerns over Frito-Lay, weakness in North America, and others. Results: 1.3% revenue growth vs. 2.7% expected, and -2% food and beverage sales volume. No surprise, so shares actually closed higher by the end of the day. Highlights of Q3: Gatorade gained market share, and core operating expanded 90 basis points despite more spending on ads. Pepsi reiterated full-year earnings growth of 8%. They will add more automation to cut costs and add healthier snacks. The street expected a bad quarter, so it sold off, but the quarter wasn't that bad.

The boring name in his portfolio. Yield is 3.1%, very secure, will grow around 6% over time. Very steady name, moving higher. With interest rates starting to fall, low-beta names like this will become more attractive. Paying 21x forward PE for 8% growth rate, not too bad. For the conservative part of your equity portfolio. 80% of shares are institutionally owned, so the smart money's in this stock.

It has been a great company for the past 40 years. There has been a consumer revolt on price increases. The growth rate is flat to down in the short term.