CapitalGainsReport: Consumer Staples Outperform in April, These Stocks Benefit (ROAG, PEP, MNST, SBEV, NBEV)
April 28, 2022 at 05:59 am EDT
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-The consumer staples market has outperformed the broader US market +3.47% vs. -9.02% over the past 30 days (Simply Wall St.).
-Investors are most optimistic about the Beverage industry which is trading above its 3-year average PE ratio of 27.1x.
-Analysts are expecting annual earnings growth of 6.8%, which is lower than the prior year's growth of 15% per year. So the market might believe that analysts are underestimating future growth.
-Investors are most pessimistic about the Tobacco industry, which is trading below its 3-year average of 24.1x.
With beverages seeing the most optimism, one beverage stock to look at is ground-to-glass tequila company, Rogue One, Inc. (OTCMKTS: ROAG).
Rogue One Inc. (OTCMKTS:ROAG) is an up-and-coming alcohol play for educated speculative investors. The tequila-focused company acquired Human Brands, which has generated an average of 302% annual revenue growth and has increased its asset holding by 2000% since 2015. This revenue is yet to be reflected on a filing, that rather large piece of news could hit any day. Now is a good time to add ROAG to your watchlist.
PepsiCo, Inc. (NASDAQ:PEP) - Earlier this week, PepsiCo reported Q1 earnings that topped analysts' expectations.
The beverage and snack company posted core earnings of $1.29 a share, topping estimates of $1.23 a share, according to FactSet. Revenue grew over 9% to $16.2 billion, higher than forecasts for $15.5 billion.
Going forward in the 2022 financial year, PepsiCo said it sees organic revenue growth of around 8%, topping its previous forecast of 6%, with core earnings growing by 8%.
"I am very proud of how our people and business have performed while operating in a dynamic and complex environment due to the ongoing deadly conflict in Ukraine," said CEO Ramon Laguarta.
Monster Beverage Corp (NASDAQ:MNST) - In Q4, the company posted Net sales of $1.43 billion from $1.20 billion in the comparable period last year. Gross profit was 53.9%, reduced from 57.7% in the 2020 fourth quarter.
Operating income for the 2021 fourth quarter jumped to $412.9 million, from $402.3 million in the 2020 fourth quarter. Net income fell 31.9% to $321.3 million, from $471.7 million in the 2020 fourth quarter. Net income per diluted share for the 2021 fourth quarter decreased 32.1% to $0.60, from $0.88 in the fourth quarter of 2020.
Splash Beverage (NYSEAMERICAN:SBEV) - Following the developments from yesterday, it is quite likely that the Splash Beverage stock is going to come into focus among investors this morning. It is a portfolio company that owns some of the leading beverage brands and yesterday it announced that it had managed to tie up an agreement with the company Beechwood Sales & Service.
Beechwood Sales is based out of Wisconsin and as per the provisions of the agreement, it is going to work on the distribution of Splash Beverage's TapouT performance drinks. The distribution is going to be limited to the state of Wisconsin. In this context, it ought to be noted that Beechwood is a beverage distributor of long-standing and has been an Anheuser-Busch product distributor since as far long back as 1987.
New Age Inc (NASDAQ:NBEV) - Another company that could be watched closely at this point is New Age Inc. There has not been a lot of news about the company in recent days but back on April 4, it had emerged that New Age had sent in a notification of late filing on the Form 12b-25.
In that filing, it was noted that the filing of its fiscal year 2021 results was going to be delayed. In addition to that, it ought to be noted that back on April 1, the NASDAQ sent in a notification to New Age stating that it had not been compliant with the timely filing requirement rules of the exchange.
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PepsiCo, Inc. is one of the worldwide leaders in producing non-alcoholic beverages and snacks. Net sales break down by area of activity as follows:
- North America (60.8%): sale of beverages (49.7% of net sales; sodas, concentrated juices, water, tea and coffee-based beverages; Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Pepsi, Propel brands, etc.), snacks (44.7%; chips, tortillas and pretzels; Lay's, Doritos, Tostitos, Cheetos, Fritos, Ruffles, etc.), and cereals (5.6%; ready-to-eat cereals, rice, wheat, etc.);
- Europe (14.5%): sale of snacks (Cheetos, Chipita, Doritos, Lay's, Ruffles and Walkers brands) and beverages (7UP, Diet Pepsi, Lubimy Sad, Mirinda, Pepsi and Pepsi Max);
- Latin America (12.7%): sales of snacks (Cheetos, Doritos, Emperador, Lay's, Mabel, Marias Gamesa, Ruffles, Sabritas, Saladitas and Tostitos brands) and beverages (7UP, Gatorade, H2oh!, Manzanita Sol, Mirinda, Pepsi, Pepsi Black, San Carlos and Toddy)
- Asia/Pacific/Australia/New Zealand (6.7%): sale of snacks (BaiCaoWei, Cheetos, Doritos, Lay's and Smith's brands), beverages and syrups (7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting);
- Africa/Middle East/South Asia (5.3%): sale of snacks (Chipsy, Doritos, Kurkure, Lay's, Sasko, Spekko and White Star brands) and beverages (7UP, Aquafina, Mirinda, Mountain Dew and Pepsi).
Net sales are distributed geographically as follows: the United States (57%), Mexico (7.7%), Canada (4.1%), Russia (3.9%), China (3%), the United Kingdom (2.1%), Brazil (1.9%), South Africa (1.9%) and other (18.4%).
PEPSICO, INC. 
