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.]