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Varchild2008 (84.02)

KO and PEP gone global does not equal growth



February 01, 2010 – Comments (8) | RELATED TICKERS: DPS

Let's put to rest this silliness that a stock like (KO) and (PEP) deserve a P/E of 18 or greater....
Because they are GLOBAL!!!!  And DPS only gets a 14 P/E?????

1st Three Earnings Quarters 2009 over 2008:

(KO)        Negative 12 cents
(PEP)                    2 cents

And Here's NOT GLOBAL (DPS):                8 cents!

That's infinitely superior to Coca-Cola and quadruple the growth of Pepsi.

Look.....   (HANS)  P/E  is around 18 if you assume the stock just MEETS analyst expectations for Q4.

(DPS) isn't being treated with a P/E that is even remotely fair.....  DOES NOT MAKE SENSE!!!

How does a stock like DPS get a 14 P/E today??   4 earnings beats in a row???

A:  They will have their major bottling center in California open in March...

B:  They will have finished the roll-out of Dr. Pepper Fountain Drinks at McDonalds by year's end

C:  They released HyDrive Chew at stores last year...

D:  They expanded last year the CRUSH branded beverage...

It's simple....

GLOBAL  isn't some Investor GOD SEND...  and anything that is NOT GLOBAL deserves to be punished and shunned.....

Global is meaningless compared to Product Quality.... and Quantity of Quality Products.

I contest... that my DPS stock has far more Quantity of Quality Products than HANS, KO, or PEP.

I also contest..... I also challenge to you NON DPS investors out there....this....

Isn't expansion of your company's beverage portfolio far more Growth Orientated than expansion of distribution of existing drinks?

By that I mean... would you rather see Coca-Cola providing the Coca Cola drink to one more Country they have not already done so...... Or would you want to see Coca-Cola produce another Smash Hit beverage product outside of the Soda Brands....Say a TEA or JUICE....that is instantly popular????

PRODUCT trumps mere Location Expansion any day.  

Otherwise General Motors should never have gone Bankrupt.

8 Comments – Post Your Own

#1) On February 01, 2010 at 6:06 PM, ozzfan1317 (73.31) wrote:

Dividend and brand recognition are why they trade a t a Premium I wouldnt pay 18 times earnings either.

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#2) On February 01, 2010 at 6:41 PM, darroj (28.17) wrote:

ozzfan has a good point. KO and PEP are also going to be more stable/safer bet since they are so well established.  PEP is incredibly diverse.. they already own JUICE (ever heard of a little company called Tropicana?) They also own quaker, frito lay, and gatorade.  I'll take that line up and pay the premium.

Disclaimer: long PEP

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#3) On February 02, 2010 at 5:14 PM, Varchild2008 (84.02) wrote:



Pepsi's YIELD is barely higher than DPS..... seriously...

I forget what the yield is for (KO) but the YIELD difference is miniscule here.

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#4) On February 02, 2010 at 5:17 PM, Varchild2008 (84.02) wrote:

Oh and While Tropicana is nice....

ORANGINA is also an extremely good brand of Orange Juice.

And since there's no Orangina in Michigan where I shop that I can find....  There's a lot more Growth Potential in ORANGINA's North American bottling portion that DPS owns than there is in TROPICANA.

So... dang....  ORANGINA =  More Growth and a very popular brand..... versus TROPICANA????

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#5) On February 02, 2010 at 7:51 PM, darroj (28.17) wrote:

Dear child,

Orangina is not orange juice. Have you ever had one? It's pretty much orange soda. "Orangina Regular has a slightly sparkling taste that gives a delicate fruity pop. All Orangina refreshments contain no less than 12% citrus fruit juice* - 10% orange and 2% accent of lemon, grapefruit and mandarin. The elaborated and well-balanced taste is enhanced with 2% pulp and zest." 

I don't know about its growth potential either. I live in North America. I can find it at some places. I don't buy it. I buy Tropicana though.

I'm not saying DPS is a bad company, or even a bad play, but I can understand the premium you pay for KO and PEP.

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#6) On February 03, 2010 at 8:42 PM, Varchild2008 (84.02) wrote:


hmm...  The bulk of Orangina seems to be ORANGE.

10%  ORANGE + 2%  PULP  =  Orange Juice to me.

Especially since I had to live with "Sunny D" when I was a kid to my dismay.... and if you want to label something as NOT ORANGE JUICE....  Then take a good look at Sunny D before bashing Orangina.

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#7) On February 03, 2010 at 8:46 PM, Varchild2008 (84.02) wrote:

Paying a Premium is supposed to be:


Where's the growth potential??????  PEP??? KO????

Sure they have fancy names....  But the stocks are already as Global as can be with really very little room for growth here..

My point is people are paying PREMIUMS just because of the sentimentality of the stock....

Awwwww.....  The stock may stink up a storm EPS growth wise.. but come on?????  I had a pair of that when I was a kid.

You know???  I mean???  Do we pay premiums JUST CAUSE?

Or do we reserve premiums for those stocks that have shown REAL GROWTH potential and REAL GROWTH expectations for the near future???

No one should pay a ridiculous P/E for Harley Davidson if you believe the growth rate has shrunk and will continue to shrink...

DPS is not such a stock with shrinking growth rates....

KO and PEP????  They have shrunk over the years BIG TIME.

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#8) On February 03, 2010 at 8:50 PM, Varchild2008 (84.02) wrote:

A minus 12 EPS year over year and everyone wants to pay over

18 times earnings for Coca-Cola????

Are Investors putting BLINDERS ON to the fact that Coca-Cola is LOSING MARKET SHARE in the U.S.????  hellooooooo????

While Coca-Cola is wasting their time in CHINA..... (DPS) and other stocks that are the beverage sector....

They are absolutely KILLING  Coca Cola's market share..

(KO) is bleeding in America....... and Investors continue to pretend and lie to themselves and to future investors?

OH yea.... The Stock is totally worth it folks!!!!  Hop on Board the BLEED A-THON...

Fine.. I am happy for Coca-Cola expanding and buying Hansen Natural Corp. Distribution rights.... and so on....

But until this PLAN of theirs translates to real EPS growth.... The stock is overpriced.

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