- why shares of PepsiCo look sweet right now;
- two important breakouts; and
- why some wishy-washy analysts got Apple's earnings wrong.
A Good Moment to Grab Pepsi Posted at 1:16 p.m. EDT on Thursday, April 26 Has PepsiCo ( PEP) bottomed? I think you can make a strong case that it has. Every single line item, from North American soda to Latin American snacks, seems to have turned up. I am a bit blown away at how much stronger some of these numbers were vs. what the Street had been expecting. CEO Indra Nooyi took some really hard medicine last quarter with a big restructuring, as well as a dramatic increase in spend in order to support brands. Both strategies worked. > > Bull or Bear? Vote in Our Poll This is an important inflection moment for PepsiCo, because there is a real negative bias against the company due to several quarters of disappointment. I do not think the analysts will budge on the name until they see several good quarters, and I don't know if you can wait for that turn. When you spend more and get this kind of immediate payback, you can see a clear runway back to stronger growth. Remember, Pepsico has much more potential for international growth than does Coca-Cola ( KO) simply because the latter gets 80% of its revenue overseas and is pretty much everywhere, whereas PEP has lots of the world to which it can reach out. That's the good news. The bad news: Coke's doing extraordinarily well and hitting on all cylinders. To me, it is worth betting with Nooyi here, especially as she has fallen out of favor with the Street. That's the real opportunity, because when they switch back on her, the stock will be in the $70s. You need to get ahead of that. It's worth doing, especially given that the stock's not even up. That's wrong. This is a good moment to get long PepsiCo before everyone else does.