Strong Brands Will Power Through In 2024

Even with markets up this year, many individual stocks have had a rough time. Some branded stocks have had a rough few years, as inflation has pushed prices higher and consumers away. For many consumer good companies in the packaged food space, the rise of new weight loss drugs has also weighed heavily.

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  • However, no trend will last forever. And changes in demand and consumer tastes can make last year’s losers relative winners.

    That’s why beaten down companies like Pepsi (PEP) stand to recover.

    Shares of the beverage and snack giant are down 10 percent over the past year. But the company has been making investments that are likely to start paying off.And recent fears about new weight loss drugs have likely hit shares harder than necessary.

    Even with the poor stock performance, revenues are up 7 percent. And earnings are up more than double that at 14 percent.

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  • Plus, with interest rates on the decline, dividend plays like Pepsi may move off oversold levels.

    Action to take: Pepsi looks oversold and ready to move higher. Investors looking for a safe play in today’s markets may find it here. Plus, shares currently yield about 3 percent.

    For traders, the April 2024 $180 calls, last going for about $2.75, could turn a trend higher in the next few months into mid-double-digit returns.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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