AMY – DAN - BRAD STEVE - NICK

PRODUCTS

Quick Facts:

1893: Introduced as “Brad’s drink” (Bradham)

Pepsi – named after the digestive enzyme and kola nuts used in the recipe

6,206.92% from 1965 to 2013 means an annual 129% return

YTD: 20%

Brief History• Formed in 1965

• Merger of Pepsi Cola and Frito Lay

• HQ in New York, NY• Over 300,000

employees• Over 200 Countries• Over $65 million in

revenues

Five Product Families

1. Pepsi-Cola2. Frito Lay3. Gatorade4. Quaker5. Tropicana

SWOT Analysis

Strengths• Diversified Products

• Industry Leaders

Strengths• Brand Recognition• Brand Loyalty

Weaknesses• Concentration of

sales

• Overdependence in domestic markets.

• Productivity

• Damaged image

Opportunities • Expanding of product

base.

• International growth

• Snacks and water

• Taste of the Generation

Threats• Nation Obsessed with

Health• Two largest product lines

• Pepsi-Cola• Frito Lay

C-A-N-S-L-I-M

Current Quarterly Earnings Weight20% Score: 3.5

***Use Diluted EPS Excluding ExtraOrd Items***5 best; 3 neutral; 1

worst% Change from previous year's quarter Current Year QTR Date Enter here Mar-13

Expected Mar-13 Dec-12 Sep-12 Jun-12EPS (Current Year) 1.17 0.69 1.06 1.21 0.94EPS (Previous Year) 0.94 0.71 0.85 1.25 1.17Qt/Qt % EPS Growth 24.47% -2.82% 24.71% -3.20% -19.66%

Current Quarter Sales Mar-13 Next Earnings Release DateMar-13 Dec-12 Sep-12  June 13

Sales Current Year $12,581 $19,954 $16,652Sales Previous Year $12,428 $20,158 $17,582

1.23% -1.01% -5.29%No Qt/Qt up 25%-50% for at least 3 quarters No Current earnings growth supported by 25% sales increases

Comments:They do not meet the requirements, but due to the type of stock that it is, a good portion of net income goes into a divident payout which has never been reduced or temporarly reduced due to economic down turns.  

QUARTERLY EARNINGS

Annual Earnings

Annual Earnings Increase Weight20% Score: 3.5

% Change from previous year 5 best; 3 neutral;

1 worstAnnual EPS Date Expected Mar-13 Mar-12 Mar-11 Mar-10 Mar-09EPS 0.77 0.69 0.71 0.71 0.89  Yr/Yr % EPS Growth 11.59% -2.82% 0.00% -20.22% ∞

Average Annual GrowthNo 25% Minimum Growth of earnings Yr/Yr #VALUE!Yes ROE 17% or better ROE = 27.15%

IBD EPS Rating =  Comments: Earnings have suffered a comeback since the recession but now have begun to grow as of this past

quarter. As a stallwart, investment in pepsi is meant for the long - run, as also shown in the overall return of the company since its IPO.  

New Products, Mang, Highs Weight10% Score: 45 best; 3 neutral; 1

worst  Date 5/7/13Last Trade $83.34 52 Wk High $ 84.32

No Coming out of a price consolidation Yes New ProductNo New Management  

Information about New Products or Management

Pepsi launched Pepsi Next in 2012 Comments about how this will affect the stock 

Considering the large amount of invesmtents in diversified products, such a positive or negative effect would not contribute a major change in the overall valuation.  

New Products, Mang, Highs

Supply & Demand Weight10% Score: 45 best; 3 neutral; 1

worst

Average Daily Volume Mkt Cap Shares Out Cap % Held By Insiders 0

5,705,074 128,880,000,000.00 1,550,000,000.00 Large (10B-

200B) %Δ, Last 6 Months -2.33

Look under your

company under Insider Transactions

No Insiders are buying up significant amounts of stock Debt/Equity: 1.32

No Recent Stock RepurchasesIndustry

Debt/Equity: 1.2No Recent Stock Splits Short % of Float: 0.80%

Comments:While there are no signs of the corporation buying back any of its shares, the stock - acting a stalwart, continues to slowly grow over time.  

Supply & Demand

Leader or Laggard Weight 10% Score: 4

Stock Performance5 best; 3 neutral; 1

worst

PEP KO DJ Index% Chng % Chng Difference % Chng Difference

3 Months 14.5% 9.7% 0.05 8.0% 0.066 Months 18.6% 13.2% 0.05 14.5% 0.04

Year-to-Date 20.2% 13.6% 0.07 12.3% 0.0812 Months 25.1% -44.7% 0.70 15.7% 0.09

2 Years 20.3% -36.2% 0.56 19.1% 0.015 Years 22.5% -25.1% 0.48 17.5% 0.05

IBD Relative Price Strength  IBD Industry Group Strength  

No Industry Leader

Comments: We gave Pepsi a 4 for this section of the CANSLIM because they weren't the industry leader but their stock performance has exceeded the industry performance in all cases above. They have also out performed one of the competitors, Coca Cola (in regards to their stock price in all cases above). Relating their current price to historical prices (the examples above), Pepsi has been able to increase the price of their stock for significantly and consistently.  

Leader or Laggard

Institutional Sponsorship Weight 10% Score: 55 best; 3 neutral; 1

worst

% Change in Institutional Shares Held 2.33%

% of shares held by all Inst & Mutual Funds 69.00%Number Inst &

MF 1574IBD Accumulation/Distribution Rating  

Yes Mutual Fund Support (At least 10)

Comments: We gave this section of the CANSLIM a "5" because Pepsi does have insiders buying stocks. They are showing confidence in the company that it is going to do well in the future; that being them buying their own stock. There is also mutual fund support and a substanstial percentage of shares held by all Inst. & Mutual Funds. 

Institutional Sponsorship

Market Status: Weight 10% Score: 2.55 best; 3 neutral; 1

worst

Market favorable for this securityYahoo Beta 0.35 Alpha   Current Ratio 1.11

PEP Industry Rel to Industry S&P 500 Rel to S&P 500Price/Earnings 21.35 20.8 1.03 27.1 0.79

Price/Sales 1.9 2.8 0.70 2.59 0.75Price/Book Value 5.67 -1000.4 -0.01 3.97 1.43Price/Cash Flow 14.4 555.8 0.03 14.8 0.97

PEG Ratio 2.08

Cash 7.01B Long-Term Debt 23.5B Free Cash Flow 6.89B

Comments: We would say that Pepsi is fairly consistent with the industry. Their Price/Earnings is just above the industry average. We do believe that the company is in position to continue smooth operations. They continue to bring out new products and bring in more revenue. In return, their stock price continues to rise and show confidence that this is a well established and valued company. According to the evaluation of the above numbers, this company would be more risky than the market itself. It's not exactly consistent with industry averages for two out of the four comparisons. Beta is "ok" actually, P/E is not far greater than the industry average but it is greater, current ratio is not greater than "2," free cash flows is greater than "0" by a lot, and lastly PEG does not meet the requirement. 

MARKET STATUS

Analysts Ratings: Weight10% Score: 4.5

(Strong Buy) 1.0 - 5.0 (Sell)

Average Rating Rating Rating Rating

1.97 2.10 1.77 2.00

Average WSJ MSN Money Yahoo

Number of Analysts 20 15 12      

 Overall CANSLIM Score: 85

LIFE - Stock Analysis Recommendation FormVersion 2-11-

2010***Ensure that all Cells are Filled Out before presenting!!!***

LIFE Analysts Name Date 5/7/13

Company PEPSI COLA Sector Consumer Discretionary Ticker PEP Industry Beverages  Last Trade $83.34 52 Wk L/H $65.68 $84.32% Between 52 Wk L/H 94.74% Short Interest (% of Float) 0.80%Dividend & Yield $2.28 2.76% IBD Overall Rating  Valueline Ratings   High Projection 140 Low Projection 115

Life Student's Recommendation

Buy Student Recommendation CANSLIM Recommendations257 - 514 # of Shares to Purchase Low-Sell High-Sell

$83.34 Purchase Price $76.67 $100.01$100.01 Up Sell Price$96.67 Up Alert Price$76.67 Down Sell Price$78.34 Down Alert Price

BUY PEPSI