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PEPSICO
INC
 
About The Company

Market Cap 103.1B
Revenue (FYR) $57.8B
EPS (TTM) $3.91
Shares Out. 1.6B
Book Value $13.39
Div/Share $1.92
Payout Ratio 47.7x
P/E 16.5x
P/Cash Flow (TTM) $5.41
Operating Margin 14.41%
Debt To Capital 53.69%
Gross Profit Margin 54.05%

PepsiCo Inc is a profitable Beverages (Nonalcoholic) company that trades on the NYSE.PepsiCo, Inc. (PepsiCo) is a global beverage, snack and food company. The Company manufactures, markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods approximately 200 countries, with its operations in North America, Mexico and the United Kingdom. The Company is organized into three business units: PepsiCo Americas Foods, which includes Frito-Lay North America, Quaker Foods North America and all of its Latin American food and snack businesses, including its Sabritas and Gamesa businesses in Mexico; PepsiCo Americas Beverages, which includes PepsiCo Beverages North America and all of its Latin American beverage businesses, and PepsiCo International, which includes all PepsiCo businesses in the United Kingdom, Europe, Asia, Middle East and Africa. The Company's three business units were organized in six segments: FLNA, QFNA, LAF, PAB, United Kingdom & Europe, and Middle East, Africa & Asia.

 

 

 

 

 
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  PEPSICO INC  (PEP) - 2011 - Year 3
ONGOING EVALUATION & TRADE
While Coca Cola may be number one, PepsiCo is a very diversified company with great earnings, lots of future potential and an excellent dividend. PepsiCo stock is not very volatile and as such the expected return is 10% for the year. This is a long term trade. On any down turn in the stock I will add to my positions.
GOAL: 10% return through option selling. Collecting the income to reduce my own capital requirements when eventually assigned shares. In other words I want to use other people's money to eventually own shares.
OBJECTIVE: Selling puts for income. Buy stock on dips for short term selling. Once assigned shares I will sell covered calls. 
PEPSICO TRADES BY YEARS
VIEW PEPSICO STOCK 2011 TRADES
VIEW PEPSICO STOCK 2010 TRADES
VIEW PEPSICO STOCK 2009 TRADES
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Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use
YEAR 1: 2009 - Trade Commenced Feb 11 2009
Goal for 2009: 9% (11 months)
Strategy: Sell Puts Until Assigned
 
Capital In Use At End Of 2009 23,000.00
Income Earned in 2009 (5 months) 3807.50
Return On Capital in 2009 (5 months) 16.5%
   
YEAR 2: 2010
Goal for 2010: 10%
Strategy: Sell Puts Until Assigned
 
Capital In Use At End Of 2010 61,250.00
Income Earned in 2010 5455.25
Return On Capital For 2010 8.9%
   
YEAR 3: 2011
Goal for 2011: 10%
 
Capital Currently In Use 30013.25
Income Earned in 2011 5441.50
TOTAL INCOME EARNED TO DATE 14704.25
Total Of My Own Capital Required 15309.00
Number Of Shares if assigned 500
Share Price Valuation
(Total Capital Required/Number of shares)
30.62

 

YEAR - 3:  2011
TRADE COMMENCED Feb 11 2009
GOAL FOR 2011: 10%

ONGOING STRATEGY - SELLING PUTS UNTIL ASSIGNED
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW

    Balance Carried Forward from 2010               9262.75
Jan 4 11 65.40 BTC 5 NP JAN 60.50 @ .08     13.25     (53.25)   9209.50
Jan 4 11 65.40 STO 5 Puts Jan 62.50 @ .28     13.25   31263.25 126.75 0.40 9336.25
Jan 4 2011:   Today I closed the 5 Puts Jan 60. as Pepsi stock has remained steady and the put premiums have evaporated again. At this point I am going to sell the 5 Puts for Jan at $62.50 for an extra .28 cents as the stock technically looks like it will hold above 65 for the next three weeks. I wouldn't recommend this trade but as I have already some Puts at 62.50 and built up 9200.00 in capital, I would roll my Puts should the stock pull back in the next 3 weeks.  .

 

Jan 21 11 65.87 Expiry 9 Puts Jan 62.50 expired                
Jan 26 2011:   Since expiry PepsiCo stock has pulled back. This is getting to be pretty common with so many of my stocks. They run up the day before options expiry and then sell off. The 10 day is showing a possible downward move for Pepsi stock prices. Momentum is just turning negative but MACD is showing a widening negative divergence which could indicate more selling to come. I will watch for a few more days as I really would prefer to stay at the $62.5 strike for my Puts. If I sell now the premium is around  three quarters of a percent but if I wait and the stock pulls back to below 64.00 the 62.50 should be worth over 1%.   .

 

Jan 31 11 64.25 STO 4 Puts Feb $62.50 @ .44     12.00   25012.00 164.00 0.65 9500.25
Jan 31 2011:   The stock has had the pullback but since this is Pepsi I am sure it will take a couple of weeks to get much lower and much meaning to $63.00. Pepsi is a very strong stock so the chance of a major pullback is not high. I sold just 4 Puts today and will keep waiting but the premiums are less than three quarters of a percent for Feb at the 62.50 strike.  .

 

Feb 7 11 63.35 STO 5 Puts Mar $62.50 @ .89
COMMENTS: Finally the stock is down and I have sold out to March for 1.4% - when added to the 0.70% I am pretty close to 1% a month for Feb and March.
    13.25   31263.25 431.75 1.38 9932.00
Feb 18 11 63.41 Expiry: 4 Puts Feb $62.50 expired                
Feb 22 11 62.60 STO 6 Puts Apr $62.50 @ 1.62 expired     14.50   37514.50 958.75 2.5 10890.75
Feb 22 2011:   What a great pullback. Hard to believe the stock hit $62.50 today. I had my sell in right away and did 6 Puts for April as I think PepsiCo stock will recover by then and I wanted to lock in some decent premiums. Meanwhile I still am holding March 62.50 puts which I sold for .89 cents. Once they expire next month perhaps the stock will still be depressed. I kind of doubt that as even the 10 day is already turning flat. Pepsi is a great stock to own so at this level there are lots of buyers.  .

 

Mar 18 11 63.24 5 Puts Mar 62.50 expired               10890.75
Mar 18 2011:   Two sessions ago the stock fell below $62.50 for the second time in a month. I should have bought shares or sold more puts or done something. Today I could see that my Puts were going to expire so I decided to step up and buy 300 shares at $63.10. I am going to hold for a few days and I will close in a week or so. I am still holding April 62.50 Puts. The 10 day SMA has crossed over the 20 day EMA which would indicate the stock is going to recover. Time will tell. .

 

Mar 18 11 63.24 Bought 300 shares @ 63.10 300 63.12 7.00 (18937.00) (18937.00)     10890.75
Apr 5 2011:   With just a couple of weeks and a big move up again today I sold near the close. There may be more upside but this was just a short term trade and I want to lock in my profit on the 300 shares. This frees up my capital and meanwhile I also sold into May at $62.50 for .44 cents. .

 

Apr 5 11 65.50 Sold 300 shares @ 65.50 0   7.00 19643.00 0 706.00 3.7 11596.75
Apr 5 11 65.50 STO 5 Puts May $62.50 @ .44     13.25   31263.25 206.75 0.66 11803.50
Apr 15 11 67.11 Expiry: 6 Puts Apr 62.50 expired                
May 20 11 71.30 May Options Expiry: 5 Naked Puts May $62.50 expired                
May 20 2011:  With my May options expiring, I really believe PepsiCo is way over valued. Coke is doing better than Pepsi and yet it is trading at just 13 X earnings whereas Pepsi is at 19X earnings. I have no interest in owning PepsiCo at such over valued levels. I will not be placing any further naked put trades until it falls back and can push up naked put premiums on the strikes no higher than $65.00. .

 

Jul 21 11 65.00 Bought 500 shares at $65.00     7.00 (32507.00)        
Jul 21 2011:  After waiting 2 months I am finally back into PepsiCo. You can read about today' s trade and my outlook on PepsiCo Stock here. Below is today's movement. From the outset the stock fell and only climbed in the last hour of trading. The is the type of opportunity I look forward to..

PepsiCo Stock Chart - July 21 2011

 

Jul 21 11 64.90 Sold 5 Puts 20AUG11  $65 at 1.00  (Assigned)     13.25   32513.25 486.75 1.49 12290.25
Jul 21 11 64.85 Sold 5 Puts 17SEP11 $62.50 at .70     13.25   31236.75 336.75 1.07 12627.00
Jul 21 11 66.10 Sold 500 shares at $66.10     7.00 33043.00   536.00 1.64 13163.00
Jul 25 2011:  Pepsi Stock continues to sell off and with the overall weakness in the market, the stock is bound to fall further. I am holding puts now at the 65.00, 62.50 and 60.00 level (with today's sell of Oct) and I am stretched out from August to October. As each month progresses, I will roll and keep rolling. Pepsi Stock is pretty strong and I am confident in the stock. It could though easily reach $62.50 is the selling intensifies in the overall market. At that point I would buy back both my $65 and $62.60 puts and roll further out and if possible down a strike each or split the puts into small groups..
Jul 25 11 64.30 Sold 5 Puts 22OCT11 $60.00 at .82     13.25   30013.25 396.75 1.32 14009.75
Aug 19 11 62.07 Expiry: 5 PUTS 20AUG11 $65.00 Assigned
Comments: I was away for much of the day so these shares were assigned. I much prefer to have the shares as I would like to pick up the dividend on August 31 and sell deep in the money covered calls against these shares.
500   20.00 $32520.00 32520.00      
Aug 31 11 64.50 Sold 5 Covered Calls 17SEP11 $62.50 for 2.95
return is the total capital invested less being exercised at $62.50 for a profit of $171.75 / 32520.00
500   13.25     1461.75 0.52% 15471.50
Aug 31 11 64.50 Dividend 500 shares X .515           257.50   15729.00
Sep 16 11 62.75 Expiry: BTC 5 17SEP11 $62.50 puts at .35
PepsiCo ended the day at $62.05
    13.25     (188.25)   15540.75
Sep 16 11 62.05 Expiry: 5 Covered Calls 17SEP11 $62.50 expired                
Sep 21 11 61.90 Sold 5 Covered Calls 22OCT11 $57.50 at $4.79
return is the total capital invested less income from the two groups of covered calls sold (Sep which expired and now Oct) and being exercised at $57.50 for a profit of $53.50 / 32520.00
500   13.25     2381.75 0.16% 17922.50
Sep 22 11 60.10 Sold 5 PUTS 22OCT11 $55.00 at .56     13.25   27513.25 266.75 0.96% 18189.25
Oct 21 11 62.28 Expiry: 5 Covered calls exercised at $57.50
This is an in the money covered call and as such I have reflected the loss of capital in the appropriate column. The entire trade made $311.00
    20.00   (28730.00) (3790.00)   14399.25
Dec 19 11 64.37 Sold 5 Naked Puts 18FEB12 $60 @ .61     13.25   30013.25 305.00 1% 14704.25
PEPSICO TRADES BY YEARS
VIEW PEPSICO STOCK 2011 TRADES
VIEW PEPSICO STOCK 2010 TRADES
VIEW PEPSICO STOCK 2009 TRADES

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
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