| PEP has been at the top of the NYSE volume list for what seems like a
week now; yesterday something like 11 million shares traded hands.
Their price is around 28 or 29, which I think is close to a 6mos
low.
I know they recently announced lower-than-expected earnings on Taco
Bell and Pizza Hut (while FritoLay continues to do well), but can
anyone account for the *continued* wave of volume? (I admittedly
haven't searched very hard for analyst news...)
Thx,
DMcD.
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| > Their price is around 28 or 29, which I think is close to a 6mos low.
Symbol: PEP (PEPSICO INC) [NYSE]
Last Trade: 29 7/8, Change 3/8 (1.27%) at Sep 11 10:23:08
Low & High: 29 1/4 & 29 7/8 (spread 5/8)
52 Week Low & High: 22 3/4 & 35 7/8 (spread 13 1/8)
Volume/# of Trades: 1094900 / 211 (5189 shares/trade)
P/E: 26.80, EPS: 1.10, Annual Dividend: 0.46 (yield 1.54%)
Market Cap: 53516.00, Beta: 1.15, EPS Growth: 9.50
> I know they recently announced lower-than-expected earnings on Taco
> Bell and Pizza Hut (while FritoLay continues to do well), but can
> anyone account for the *continued* wave of volume? (I admittedly
> haven't searched very hard for analyst news...)
The volume started after some South American country or another
switched from Pepsi to Coke for something or another. I've
been keeping my eye on it since. The also got a mention on
W$W from a Food/Beverage/Tobbaco analyst who confirmed that
PEP is much more diversified than KO (as you mentioned, Taco
Bell, Pizza Hut, Kenntucky Fried Chicken, Fritolay, ...).
The previous two trading days it's move from 28 to now almost
30, so I missed buying in before the short-term rebound. But
I think it would still be a good long-term buy at this point
(but note that I haven't bought yet myself :-)
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| re: .-1
> I think it would still be a good long-term buy at this point
> (but note that I haven't bought yet myself :-)
Thanks for the response, Jeff. Having convinced myself it's transitioned
to rebound mode (despite not doing my characteristic research), I bought
a small lot yesterday.
Looking for a food/beverage stock I considered KO; despite being less
diversified (or maybe because of it) it's -- of course -- sitting pretty
at/near a year-high, after several phenomenal years of growth. Seems a
bit late to jump in (although that's what I said about MSFT not long
ago, 'round a [pre-split] $80....;-).
DMcD.
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| Symbol: PEP (PEPSICO INC) [NYSE]
Last Trade: 33 7/8, Change -3/8 (-1.09%) at Jan 24 5:01:40
Low & High: 33 3/4 & 34 7/8 (spread 1 1/8)
52 Week Low & High: 28 1/8 & 35 7/8 (spread 7 3/4)
Volume/# of Trades: 5783600 / 1803 (3207 shares/trade)
P/E: 42.80, EPS: 0.80, Annual Dividend: 0.46 (yield 1.36%)
Market Cap: 53516.00, Beta: 1.15, EPS Growth: 9.50
PepsiCo To Spinoff Its Restaurant Businesses
Nightly Business Report, Thursday, January 23, 1997 at 21:57
SEIFERT: One stock that did well today was PepsiCo. Traders bid up the
shares all day in anticipation of news that came out after the close. If
shareholders approve, they'll soon hold two stocks as the soft drink giant
spins off its restaurants. Scott Gurvey reports.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It would be one of the
largest fast food companies in the world and would include the 30,000
restaurants of KFC, also known as Kentucky Fried Chicken, Pizza Hut and Taco
Bell. PepsiCo stock lagged the market during much of last year's rally, and
analysts blamed the restaurant group. It accounted for 37 percent of sales
but only 24 percent of profits.
ROY BURRY, BEVERAGE & TOBACCO ANALYST, OPPENHEIMER: The stock closed
yesterday at $32 a share. The fair value here is $33 to $37, based upon
these two businesses trading separately. The stock is now trading within this
range. So if it doesn't occur, the stock could go back down. And if it does
occur, the stock already reflects some discounts. The benefits of spinning
off the restaurant business.
GURVEY: The restaurants were actually the real drivers behind PepsiCo's
earnings until two years ago. Analysts say the sector has simply become too
competitive to support higher margins. Some investors have been pushing for a
spin-off, and it would be a bold move for CEO Roger Enrico, who took over the
top job just 9 months ago. Spin-off would allow Enrico to concentrate on
Pepsi's core soft drink business as well as the high-margin salty snack food
division anchored by Frito-Lay. The spin-off would also remove a problem
similar to the one that led AT&T (NYSE:T) to spin off equipment maker
Lucent (NYSE:LU).
Pepsi salesmen often find resistance when they try to sell to restaurants
that compete with the local KFC, Pizza Hut and Taco Bell. Wall Street
certainly liked the idea, bidding up the price of Pepsi stock even without
definitive news about a spin-off.
JAY NELSON, BEVERAGE ANALYST, BROWN BROTHERS HARRIMAN: I think there's a lot
of room for Pepsi's multiple to expand even without a restaurant spin-off.
But on a short-term basis, you're going to give some price back if the deal
doesn't go through.
GURVEY: In addition to the spinoff, the company also announced a regular
dividend, 11.5 cents a share. The record date is March 14. Scott Gurvey,
NIGHTLY BUSINESS REPORT, New York.
Nightly Business Report transcripts are available on-line post-broadcast.
The program is transcribed by FDCH. Updates may be posted at a later date.
The views of our guests and commentators are their own and do not necessarily
represent the views of Community Television Foundation of South Florida,
Inc., Nightly Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment advice.
(c) 1997 Community Television Foundation of South Florida, Inc.
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