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Pepsi Co and Coca Cola Stock Analysis - Essay Example

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INTRODUCTION This report analyses the stock price of two companies; Pepsi and Coca Cola. The report uses the stock price movements of the two companies and then identifies which of these companies yields more returns and which of these companies is riskier…
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Pepsi Co and Coca Cola Stock Analysis
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Download file to see previous pages The report at the end presents the summary of what has been learnt in the report. COMPARING THE STOCK PERFORMANCE OF TWO FIRMS Historical prices of Pepsi co Adjusted closing price has been taken for the calculation of returns and risk. The average stock returns are found to be negative (-0.08) (Yahoo! Finance, 2013a) Historical Prices of Coca Cola Company STDEV 0.0101 The Adjusting closing has been taken for calculating returns and risk. The average returns are negative (-0.15) (Yahoo! Finance, 2013b). Dow Jones Industrial Average NASDAQ Composite Index The latest price at which the Pepsi co Philippines traded is 6.19, it is 10.03% below its high 52 week of 6.88. The listing of Pepsi co products are primarily on Philippines Stock Exchange (Financial Times, 2013). (Financial Times, 2013) Market closed at 40.81, which is 6.03% below its high 52 week of 43.43. The listing of Coca Cola Company products are primarily on NYQ. Interest Rates: For the last four years wages are being flat and there is no hint of an increase in inflation rate. In 1980s, women began to enter labor force, but still the work force participation is at its low rate. After the financial crisis the financial system has improved a lot, capitalization of the banks are managed in a better way, balance sheets are being improved by both the corporations and households and all these factors can positively impact not only the two companies but Dow Jones index as well as NASDAQ. Industry News: Despite the continuation of Fed with the policy of buying bonds and accommodation, stocks were more than expected rallied on Monday. The Dow industrials were at a positive sign for the whole day despite the sharp rise in Intel and Merck. With a success of key drug trial, Merck was up 3.8% while with the introduction of new processors of fourth generation, Intel was up to 4 %. The Dow industrial average was increased by 138 points at the closing with 15,254 and NASDAQ was up to 9 points with 3465. 545 million shares were traded by NASDAQ; there was an increase in the volume on NYSE with 879 million shares being traded. Dow Jones industrials violated the moving average of 20 day. The support zone focused concentration on Monday with 15,115 from 15,000. The index of Dow Jones was on a lead till March. Therefore such factors can also impact companies like Coca Cola and Pepsi as they are also traded on similar stock exchange. Company News The Coca Cola Company has announced its investment in Myanmar on Tuesday 4th June. The production of the company will be in Myanmar with an investment of $200 million. This investment will lift its shares in the market and profits will be enormous. The coca cola company was given the investment permit for the foreign investment Law by Myanmar. It is the first production of Coca Cola in decades. The Dow Industrial Average secured an uneven recovery has led the 30 giants of America which includes Coca Cola Company, Microsoft etc to the most comprehensive event (Eavis, 2013) PepsiCo has started its joint venture with the Theo Muller Group, established a new art-state manufacturing of yogurt plant in Batavia, New York. There’s an employment capacity of around 180 people. PepsiCo is the leader in food and beverages it has no less than $65 billion of net revenues. With twenty two brands in the portfolio PepsiCo enjoys over $1 billion to in each brand in a result of its annual sales. With the joint venture with the Theo Muller group Pepsi co enjoys expansion in stocks. PepsiCo due to increasing its price on Feb. 2013, ...Download file to see next pagesRead More
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