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Varchild2008 (84.02)

The Argument for Dumping the DOCTOR (Pepper)



July 22, 2008 – Comments (3) | RELATED TICKERS: DPS , KO , PEP

The Entire Beverage Sector (and I exclude bottling companies or any company that isn't specifically a company that sells/provides drink formulas to bottlers) has been creamed into a smithereens this year.

There's something wrong when Coca Cola and Pepsi both have a large Snack Foods product line and yet have seen their stocks trade at or new 52 week lows since January.

Dr. Pepper Snapple Group hasn't produced a bad earnings report but has shown that it TOO is vulnerable to the same pressures of Coca Cola and Pepsi and unfortunately doesn't provide a dividend and doesn't really have a snack foods product line except maybe "MOTT's Apple Sauce."

But that's not the reason to dump the Doctor.  No.   DPS is far too young a stock to give up on purely on economic, consumer, volume purchasing concerns and input costs.  Those types of things are essentially irrelevant when it comes to the overall picture of a stock.

The only reason that would truly motivate me to dump the Doctor for GOOD reason is if I happen to have a *handcuff* sitting on the bench.  I happen to have such a handcuff in CCBEF.

Check CCBEF (Clearly Canadian's) chart.  Based on the chart alone how could anyone argue against the growth rate of this stock?  Trading around 70 cents a share near the beginning of the year to now trading at $1.21, this has been virtually the only SUCCESS story in the beverage industry this year...

Well...granted.... you could argue that Wim Bil Dan and other foreign beverage companies have done well this year.  Fine.... But those stocks are *expensive* and frankly.... Besides a few water companies and such there isn't anything in the whole sector performing better than CCBEF.

CCBEF has also just received analyst coverage by Wallstreet Research and feel free to check out their report listed at

Bottom line is this.... 

Go long on DPS for what?

Or Go Long on CCBEF for a potential doubling of your income next year?

CCBEF has a much larger expansion / growth potential than DPS.  CCBEF has over $5 million of cash on hand to expand their business.

CCBEF has cut their costs and expect to end their transistion costs to Toronto by the end of 2Q.
CCBEF expects to start pushing their products to America for the first time real soon from now.

CCBEF is clearly an excellent *handcuff* sitting on the bench.

So why pass on the opportunity?  Seriously.....  Can someone explain to me why I am still invested in DPS and why I haven't a share in CCBEF?  what the heck is wrong with making the swap?

3 Comments – Post Your Own

#1) On July 22, 2008 at 12:07 PM, Schmacko (91.08) wrote:

Ummm.... because CCBEF is an OTC penny stock that has done nothing but lose money over the last five years.  Bottled water is a highly competitive industry and there has been a lot of consumer backlash against it recently due to enviornmental and economic concerns.  They also seem to be buying up organic food companies and the organic food industry is getting squeezed right now since consumers are realizing they don't have the extra cash to pay twice what food is worth simply because it has "organic" on the label.

I'm not saying you can't make money off the play in the wild wild west of penny stock volatility, I'm just saying the underlying company is not a good investment.

Does this post mean the DPS bull is dead?

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#2) On July 22, 2008 at 3:05 PM, Varchild2008 (84.02) wrote:


No.  There's no way you can declare DPS bull dead after 1 earnings report when the stock itself hasn't even had a full year behind it.

The thing with DPS is that at some point.... some thing... is going to happen with that stock that will propel it to the 30s.

The question is how much patience do you give DPS?  How long do you sit on a stock in your portfolio whose chart still can't find the bottom?

The stock has produced a 19 handle.  For a beverage company with a multi-billion dollar capital.... That's trying one's patience to see that.

CCBEF is no longer the "Debt" ridden company that can't produce a profit.

CCBEF struggled (just as DPS is doing today) back when it was a Beverage Only corporation.  CCBEF's stock price has now nearly DOUBLED since January because in Mid-Late 2007 CCBEF acquired some Snack Companies + Baby Food Company.

CCBEF even has a Natural NUTS department.

That stock is not to be ignored simply because of its track history.  You can't ignore a stock that has gone through a transformational period and has produced an excellent earnings report coming out of transistion.

Companies that have shown to be ready to expand their businesses like CCBEF are companies we should be investing in.

Problem with DPS is that there's no catalyst until 2010 when the California Warehouse is built and hopefully generates bigger growth revenues to increase the Stock Price.

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#3) On July 22, 2008 at 3:07 PM, Varchild2008 (84.02) wrote:

Let me put DPS is SIMPLER TERMS:

DPS is right now strictly an "EARNINGS REPORT" driven stock.

No real action happens until Earnings Report day. (yippe).

If I wanted an "EARNINGS REPORT" driven stock I may as well invest in a Penny Stock (OTC) instead!

DPS can't get its stock price up even with expert analysts on CNBC chiming in their adolation for the thing.

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