Cola Wars?
Over the last few months, I have been giving you advice to help you rearrange your portfolio to protect it during these difficult economic times. There is a small sector that I have yet to mention, and that is the soft-drink makers.
Both Pepsi (PEP) and Coca Cola (KO) have been in up trends for the last six years, and have maintained those trends despite the problems with the economy. Even during the bear market of 2000-2002, both outperformed the market.
Another reason to consider these stocks is that both companies have been growing rather than shrinking revenue. In the most recent quarter, PEP and KO reported revenue growth of 13.4 percent and 20.9 percent, respectively. This tells you that Pepsi and Coca Cola are still expanding.
People are creatures of habit. Even when the economy slips a little, there are certain things they will continue to buy – including Coke and Pepsi products. For example, I am personally addicted to Diet Mountain Dew, and regardless of what happens with the economy (or what ETR’s health editors tell me!), I will maintain my usual consumption. (I won’t tell you how much that is. The health group might pass out.)
[Ed. Note: Rick Pendergraft is a professional trader and market analyst. In Rick’s new investment service, he gives easy-to-follow, step-by-step advice that you can use to create consistent, automated income. Learn more about how he can help you produce explosive gains – no matter which way the market is trading – by clicking here.]Rick Pendergraft
Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.