I’m Not The Only One Cutting Down On Sugar, But I Still Love My Chips
PepsiCo Inc. is giving investors a window into the mercurial mind of U.S. consumers, who say they want to be healthier -- just not at the expense of their favorite salty snacks.
The company’s latest results highlight the juxtaposition. On one hand, shoppers are pursuing healthier beverages and trying to cut down on sugar. That’s sending overall soda consumption to its lowest level in more than 30 years and fueling an expensive decades-old battle for cola market share between Pepsi and arch-rival Coca-Cola Co. But as diners forgo fizzy drinks, they’re still chomping down on high-calorie potato and corn chips with no signs of a slowing appetite.
The company generates more than half of its revenue from food, and Plano, Texas-based Frito-Lay continues to dominate the chip aisle, with old favorites like Ruffles and Doritos. Profit in that unit was up 5 percent in the most recent quarter. That helped Pepsi beat per-share profit estimates by 9 cents in the second quarter.
SIDE NOTE:
I was talking to my father-in-law, who is a retired Nurse. We were talking about my mother’s health and how I want to eat better as I age as a means of preventative maintenance. He mentioned over time, the kidney loses its ability to filter stuff out of blood (i.e. excess salt) and that’s why hypertension in America is such an issue, it’s irreversible and requires medication to treat it.
Monthly Chart (Curve Timeframe) – monthly supply is at $121 and monthly demand was at $103, but was breached in May.
Weekly Chart (Trend Timeframe) – the trend is sideways at the moment. Priced breached the first weekly supply zone at $110 and is now sitting in the second weekly supply zone at $113. However, based on the candle structure I'm not in love with the weekly supply zone at $113.
Daily Chart (Entry) – after taking a closer look at the candle structure on the daily chart, I think the stock is worth shorting by taking a #3 entry, meaning wait for price to leave the weekly zone at $113. If price breaches the $113 weekly zone on the upside, cancel the trade.
Overall, I like the set-up because there is a zone on top of a zone, so the zone at $110 absorbed some of the buyer orders. Also, price took out the monthly demand at $103. Lastly, PepsiCo, relative to the S&P 500 has been trending down.
NOTE: top line chart is Pepsico relative to the SPY (ETF for the S&P500) and the bottom line chart is the SPY.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
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Haha....nice analysis, GREAT title. ;-)