I do worry that PepsiCo is one of those serial boosters of its dividend and large buyers of stock, and that might be put on hold with a Biden victory. I was surprised that nothing about Biden was mentioned in that PepsiCo upgrade the other day by Citigroup because I think that is one of the companies that could be affected by higher tax rates. It's a fact of life.
That said, this company's shareholders have experienced many a tax regime, and it is taking them all in stride. I know. I've been tempted to take some … off the table right here. I mean, what is it? – 142 – strictly because of how fast the stock falls when things don't go well. And we will downgrade our rating to 2 as soon as [the] shares have rallied about 10 bucks since the most recent buy in September. But I think the stock works its way higher under either administration. No letup in the selling.
Starbucks. (SBUX) - Get Report $90. Bam. I worry every day that the president is going to make Starbucks CEO Kevin Johnson's life miserable with some offhanded comment or tweet that could really set back relations between the United States and China. Our country is still experiencing double-digit comparable-sales declines – really, double-digit declines. But the virus has met its match on the point of origin – China – and the sales of Starbucks are coming back pretty quickly in China.
Starbucks has been the big beneficiary of the failure of stimulus because that has led to many empty storefronts that are just right for Starbucks to take advantage of and open what are essentially walk-through stores that are all done by digital. In China, it will no longer have to fear a boycott. Suddenly, it helped drive the stock down to the 50s from the 80s not long ago. Never forget … that Starbucks is a China story, and it can have far more [stores] in it than in America.
Oh, here's the tough one: Take-Two (TTWO) - Get Report franchise. I don't know what will happen in China. I do know this: If NBA 2K is their favorite franchise I've never been worried about it under Trump. But that doesn't mean he can't make a second-term set of problems for the NBA, which … he probably dislikes because the NBA players seem to be overly, let’s say, critical of him. If Biden were to win, that would remove a potential headache … but no more than that.
I am sure there'll be revival of the notion of Grand Theft Auto … being bad for kids, but then Take Two will be able to show that's not the case. And it has repeatedly and clearly shown me that it's not a problem, that the Senate’s … whatever committee looks at it, it doesn't matter. Things will move on.
Either way, this one has a bright future because what matters here is next month’s next-gen-console cycle, not the election cycle. Take Two is looking at one of the strongest pipelines in its history that will span several years and release games into the largest installed base in history.