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Varchild2008 (83.79)

Messed up expectations (HANS) (DPS)



December 22, 2010 – Comments (6) | RELATED TICKERS: DPS , MNST

Based on expecting HANS and DPS to merely meet expectations for Q4 2010 eps,  both stocks would end up with an eps of $2.38  (per Scottrade Charts which I believe calculate the eps without the one time items).

So why is HANS trading over $53 a share?    While Dr. Pepper Snapple Group is selling off today and is as low as $36.39?

Is it because HANS is a global stock while DPS is a stock that exists mostly in just North America?

If that were true then please explain to me why stock analysts predict:

HANS  Q1 2011  eps  44

DPS    Q1 2011 eps  51


Q4 2010 eps prediction for HANS:  .62

Q4 2010 eps prediction for DPS:   .64


So people are willing to pay 22.5 times earnings for (HANS)
and people are willing to pay  15.25 times earnings for (DPS)

That in spite of analyst expectations for THIS quarter and for NEXT quarter favoring heavily Dr. Pepper Snapple Group.

Look....   The 2 combined unreported quarter earnings for the 2 companies gives DPS an EPS advantage of  9 cents a share....  Nearly a double digit improvement over HANS!

Ohhhhhhhh But... There's more to it than EPS???  right???

A HANSEN Natural Corp Investor would point out  DR. PEPPER Snapple Group's high amount of debt.

But, a DR PEPPER SNAPPLE  Group Investor could turn-a-round and point out the total lack of a dividend payment from HANSEN Natural Corp.

So wins here?

HANS could point out the 16.9% net profit margin easily beats DPS's  9.5%.

But, DPS could point out that its share price is just 1.5 times sales.....  While HANS is a bloated 3.7 times sales.

And the battle of the beverage companies not named (KO) and (PEP) marches on.

6 Comments – Post Your Own

#1) On December 22, 2010 at 4:03 PM, chk999 (99.96) wrote:

The only thing investors could be rationally trying to price in is an expectation of high growth for a long time for HANS. Since I'm kinda dubious about that growth it looks overpriced to me.

DPS on the other hand looks like it is worth a closer look. 

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#2) On December 22, 2010 at 10:11 PM, Varchild2008 (83.79) wrote:

I have a 2011 $44 price target on DPS.... A stock that is my retirement stock..the main stock in my portfolio.

However, with oil prices spiking through the roof lately....Might have to shave off a buck or two on my price target for the stock.

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