Pepsi Call?

7 feb 2021

Company Profile:

PepsiCo, Inc. engages in the manufacture, marketing, distribution and sale of beverages, food, and snacks. It is a food and beverage company with a complementary portfolio of brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. It operates through the following business segments: Frito-Lay North America; Quaker Foods North America; North America Beverages; Latin America; Europe Sub-Saharan Africa; and Asia, Middle East, and North Africa. The Frito-Lay North America segment markets, distributes, and sells snack foods under the Lay's, Doritos, Cheetos, Tostitos, Fritos, Ruffles, and Santitas brands. The Quaker Foods North America segment includes cereals, rice, and pasta under the Quaker, Aunt Jemima, Quaker Chewy, Cap'n Crunch, Life, and Rice-A-Roni brands. The North America Beverages segment consists of beverage concentrates, fountain syrups, and finished goods under various beverage brands such as Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist, and Mug. The Latin America segment covers beverage, food, and snack businesses in Latin America region. The Europe Sub-Saharan Africa segment comprises of beverage, food, and snack goods in Europe and Sub-Saharan Africa regions. The Asia, Middle East, and North Africa segment offers snack food products under the Lay's, Kurkure, Chipsy, Doritos, Cheetos, and Crunchy brands. The company was founded by Donald M. Kendall, Sr. and Herman W. Lay in 1965 and is headquartered in Purchase, NY.


Financials (Comparison vs Coke)
Competitors: Coke, Kellogg’s, Conagra)

There are 7 things I compare when researching stocks. I make sure I find at least 2 strong competitors for the best analysis I can give! I only post 1 comparison for the sake of time.

1. Return on Investment Capital
2. Price to Book Ratio
3. Price to Earnings Ratio
4. Net Margin%
5. Return on Total Assets
6. Return on Equity
7. Earnings per Share

1. ROIC
Company: Pepsi
Q2 14.64%
Q3 14.64%
Company: Coke
Q2 17.71%
Q3 15.30%

2. P/B Ratio
Company: Pepsi
Q2 14.30
Q3 14.23
Company: Coke
Q2 10.70
Q3 11.25

3. P/E Ratio
Company: Pepsi
Q2 26.35
Q3 27.48
Company: Coke
Q2 20.49
Q3 25.27

4. Net Margin %
Company: Pepsi
Q2 10.32%
Q3 12.66%
Company: Coke
Q2 25.02%
Q3 20.03%

5. Return on Total Assets
Company: Pepsi
Q2 8.32%
Q3 8.31%
Company: Coke
Q2 9.95%
Q3 9.03%

6. ROE
Company: Pepsi
Q2 51.81%
Q3 51.00%
Company: Coke
Q2 51.53%
Q3 44.66%

7. Diluted EPS (Recent Two Quarters)
Company: Pepsi
Q2 1.18
Q3 1.65
Company: Coke
Q2 0.41
Q3 0.40

Fundamental Analysis

To keep things simple, I like this stock for a CALL due to their market competitors financial statements. After looking at their financials the main thing I noticed in comparison with Coke was the NET MARGIN%. Pepsi ranged from 10.32% to 12.66% while Coke (9.95%to 9.03%). These were quarterly comparisons and it tells me that Coke isn't profiting as much as they could be compared to other market leaders. Even though both Pepsi and Coke will strip their Super Bowl Ads, Pepsi will still sponsor the halftime show!

Technical Analysis

Stochastic RSI: White line is rising up towards the green line yet, still at a low point on the indicator which means price could be retesting the current resistance zone.

Fibonnaci: Ranged from the potential "Current Support Zone" to the "Current Resistance Zone". I'm looking for a retracement of the previous high being $147.37. I'm expecting a retracement of anywhere between 30% and higher.

MacD Squatter: White line is still below the zero line and momentum is losing strength. Tells me that price could be moving up.

Current Price:$ 141.70 After Hours 
Strike Price: $141.78 - $148.00.



Stop Loss: $132.00

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- Amateur Robinhood Trader lol