DPS

Dr Pepper Snapple Group Inc.

Consumer


Presented:11/05/2014
Price:$69.00
Cap:$13.40B
Current Price:$36.92
Cap:$49.89B

Presented

Date11/05/2014
Price$69.00
Market Cap$13.40B
Ent Value$15.69B
P/E Ratio22.07x
Book Value$12.15
Div Yield2.3%
Shares O/S194.41M
Ave Daily Vol1,570,000
Short Int5.51%

Current

Price$36.92
Market Cap$49.89B
Dr Pepper Snapple Group, Inc. operates as a brand owner, manufacturer, and distributor of non-alcoholic beverages in the United States, Canada, Mexico, and the Caribbean. The company operates in three segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages. It offers a portfolio of flavored (non-cola) carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including ready-to-drink teas, juices, juice drinks, mixers, and water. The company’s brand portfolio includes CSD brands, such as Dr Pepper, Canada Dry, 7UP, Squirt, Crush, A&W, Peñafiel, Sunkist soda, Schweppes, and Sun Drop; and NCB brands comprising Snapple, Hawaiian Punch, Mott’s, Clamato, Mr & Mrs T mixers, and Rose’s. It sells its products primarily to bottlers, distributors, and retailers. Dr Pepper Snapple Group, Inc. was incorporated in 2007 and is headquartered in Plano, Texas.

Publicly traded companies mentioned herein: Dr Pepper Snapple Group Inc (DPS), Suntory Beverage & Food Ltd (2587 JP), The Coca-Cola Company (KO), Pepsico Inc (PEP), Kellogg Company (K), General Mills Inc (GIS)

Highlights

The presenter believes the carbonated beverage industry faces secular challenges, and is short shares of Dr. Pepper Snapple (DPS) because the company appears to be particularly vulnerable for a number of reasons. The shift in consumer behavior towards generally healthier diets, and a focus on deterring consumption of high calorie sodas are both negative for volumes “in perpetuity.” At current levels (~$70), the risk/ reward profile of a bearish bet on DPS appears to be favorable.

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Idea Discussion

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