Investment "Logic"

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. On Wednesday, Pepsico announced their fourth quarter and fiscal year financial results for 2014.  The company did an excellent job of beating expectations on the fourth quarter by generating $1.12 of earnings on $19.95B in revenues.  Both numbers handily beat wall street expectations of $1.08 EPS and $19.66B in revenues.  I made a mistake in my weekly summary, stating I was looking for high digit organic growth - that was supposed to be earnings growth.  Earnings grew 7% from the same quarter a year ago, and 9% on the annual numbers.  Going into the call, the biggest concerns were foreign exchange impacts, business in Russia and V...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today Pepsi announced their third quarter earnings results and they were quite strong.  Earnings beat estimates, coming in at $1.36 while revenues also grew more than expected, coming in at $17.2B.  On top of that, they delivered the icing on the cake by increasing their 2014 estimates to 8% EPS growth on the year.  Included in this was a 45 basis point increase in margins.  All of this in the middle of what CEO Indra Nooyi calls a "challenging macro environment."   There wasn't much for bad news that you could pull from the call.  Yes, there are signs of economic pressures globally, but that hasn't really shown itself in r...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. In the latest summary, I said the only stock that had earnings announcements that I needed to pay attention to was Alcoa.  This was an inaccurate statement.  Despite all my efforts to find out, it appears that I've missed Pepsico announcing earnings on Thursday.  As such, I want to take a few minutes to lay out what is expected and how my investing plan plays to those expectations. The earnings announcement for Pepsico has the potential to not only affect its own stock, but also the market broadly.  They are an international food and beverage company and have the potential to help set the pulse of the global economy, which currently ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash Wednesday, Pepsico announced solid results for the second quarter.  This might be a somewhat muted reaction to the results.  Truth is Pepsi announced a fantastic quarter when you compare what they've delivered compared to what many other similar/competitive companies have announced so far.  This leaves me grateful I didn't sell a single share over the last quarter, but at the same time shameful for having doubt in the company and the stock.  I feared the stock was getting too rich for its growth and the yield was getting too small.  There may be some truth to these items, but interest rates are low, portfolios need to be diversified, and Pepsi has been the best in the consumer goods sector bar none.  Earnings came in at $1.32, which handily beat the $1.23 estimates ...

Ding! Ding! Ding!  Welcome to round two of our activist investor showdown!  Yesterday Pepsico announced their first quarter fiscal 2014 earnings.  After the drubbing Nelson Peltz and his firm has given the company since the last earnings call, this was a nice counter-attack - letting it's business, give Peltz the business.  Now for those not aware, Nelson Peltz is a highly respected hedge fund manager.  He has a storied history of convincing various food and packaged goods companies to take actions to benefit the investor (himself and others).  The strategy lately is to break companies up to "unlock value" and this is the proposition being pushed upon Pepsi - requesting that they spin off their snacks division because the beverages division is holding them back.  As a part of the 2013 year end conference call, Pepsi announced their research and findings which they believe proved that there were a very large number of synergies between the snacks and be...

Next week's biggest key is to prepare for and react properly to the US Jobs number that comes out Friday morning.  I feel this will be very difficult to do.  It's possible many big money firms are already placing their bets - selling some winners ahead, and probably buying other stocks they believe to benefit.  However, the real question is not what the jobs number will be compared to estimates, but rather how will the market react to them?  !0 year treasuries are already down over 12% on the year - indicating that there's still strong interest in the safe treasury market and doubt on the economy's strength.  So if the jobs number comes in below expectations, will this be a "Bad news is good news" market, where stocks jump because the Fed continues their bond buyback program - keeping treasury rates low - or do they sell off because the S&P 500 was up almost 30% last year and is about flat on the year after dropping almost 6% earlier in the year?  Being...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash As I'm sure anyone can guess, Pepsico is the parent company to the Pepsi brand of soft drinks.  Additionally, they also are the parent company of brands such as Lays potato chips, Tropicana juices, Quaker Oats, Mountain Dew, Aquafina bottled water, Gatorade sports drinks, and many other global and regional brands of consumer goods.  It is the number 2 soft drink maker to Coca Cola, and one of the most notable snacks makers in the world.  Pepsi is behind Coke in it's global distribution which is providing an opportunity for larger growth.  The company is led by a strong and reliable CEO by the name of Indra Nooyi.  Since I've started following this company over 3 years ago, she was at the front of recognizing the challenges of a culture that is quickly shifting to healthier ea...

Another day, another analysis of one of my holdings.  Today we'll cover Pepsico.  I've held this stock for a couple years now and although there have been some tough times along the way, it's done pretty well for a "safety stock."  This was and still is one of my reasons for holding this stock in my portfolio.  I wanted something to help keep my portfolio stable and perhaps counter what happens in my more cyclical stocks on bad days.  I also picked Pepsico because despite being a relatively safe stock, it also showed signs of growth as it was expanding in foreign markets as well as taking on initiatives to make its products healthier - a common trend in most food stocks which are performing well.  At the time of purchase, it also had a very healthy dividend of 3.25% or more, which I have happily been collecting along the way with the positive price performance.  But how is Pepsi shaping up now?  Does it have room to run, or is it time to let go? ...

So last Friday we received enough bad news to make a funeral look fun. Jobs numbers were less than half of expectations, Yields for some of government bonds for problem countries in Europe like Spain are approaching an unsustainable 7% and major sources of growth in the past like China and Brazil are slowing significantly. Basically the world was ending according to news related to the equity markets. So what now? What do I plan to do in such a questionable market? To start with, where am I now from where I was over a month ago (wow, I've really been slacking on the blogging world)?  Not much has changed, actually.  I didn't sell any of my Citigroup stock at the points I was thinking of because it dropped so fast from the JP Morgan ordeal.  I suppose I could've had a stop in place, but considering the rate of decline, I think this is the better option.  Citi's price to book is close to half when the norm is actually 1 - 1.5 on average.  When (not if) the mark...

It's that time again.  Time to circle the wagons.  As I sit here looking at how the market has acted as of the last 2 weeks and recognizing I'm just starting a new slew of earnings reports, I recognize the second quarter isn't likely to be as friendly as the first was to us and it's time I stake my position, make my predictions, and try to establish some semblance of a plan.  Once again, I'm nothing more than a rookie, doing this more as a hobby with desires to improve upon my abilities day after day.  Had I a teacher, I'd be informed "I have much to learn." as I hang my head in shame. So where do we begin?  Well, no better place than with what I have now, I guess.  I still have the same 7 stocks and I have successfully managed to make sure I have cash on hand to buy things that strike my fancy.  The one thing I can say is that I don't really want to hold more than 7 stocks.  Considering BWEN as a stock I still hold is a tough pill to take. ...

I've heard a lesson once that it's good to take a look at your stocks when the markets are closed and rank them once a week.  The purpose is to be able to look at your holdings without the stresses of a moving market to influence your stance on things.  I haven't been able to make this a personal habit yet and even if I do, I don't think I'll post it all here every time, but I'm looking to do it today and want to post it because I think it has some additional merit.  In today's news, a number of things have come up which have the potential to change the general feel of the market compared to the first couple weeks of the year.  First, a number of EU countries have been downgraded by S&P, second Greece is announcing it is having difficulties coming to agreements with its bond holders to prevent the country from defaulting.  In 2011, Greece and the EU as a whole was a huge impact on the markets in a negative fashion and after 2 weeks of the stock market on...