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Non-Tech : Pepsi -- Gotta Have It?
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To: Michael Collins who wrote (16)2/3/1997 8:24:00 PM
From: Mat Miller   of 27
 
Hi, Michael.

Perhaps your question was retorical, but the standard answers are:

1. Write-offs - One time only write-offs that now have occurred in the last 3 out of 4 quarters. Without them, earnings would have been around 1.30 so the P/E would be closer to 26.

2. Spin-off of restaurants to have Pepsi be valued at its higher growth of beverages.

3. Well-known company in a relatively high price stock market overall.

And yes, if (when) the market goes down, Pepsi will go down with the best of them. Like in '72-74 down 66%, '87 down 40% from its highs.
Of course, this was less than the worst of them and within less than 2 years from the lows, it was back to the previous highs.

Mat
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