PEP trade ideas
New Pairs Trade (Long PEP vs Short MNST)Hey traders, today I share a pairs trade I put on, going long $PEP and short $MNST in equal amounts betting on a reversion to the mean in the next couple of days and with a tight stop loss to limit the downside.
These are two similar stocks which make for a great pair and you can see on the Range Strength indicator the pair is currently trading in a strong range which is what we want to see before we take a signal from the Buy Sell Bands.
Stay tuned as i'll be updating this trade idea as it progresses.
Have a great weekend!
Jared
Buying Pepsico; Fitch just affirmed credit rating "A" EPS FY 2019 = 5,228
EPS FY 2018 = 8,84
EPS FY 2008 = 3,26
EPS FY 2009 = 3,81
Pepsico; stable EPS over the last 20 year with a positive drift
PepsiCo was trading at an average P/E ratio of 12,5 between the announcement of FY 2018 and FY 2019 earning reports. High EPS of $8,84 in 2018 were the reason for a significatly low P/E ratio. The final earnings report 2019 brought EPS down to $5,28, leading to a rise of the P/E ratio towards 25. The stock price fell by 22% recently as a result of the COVID-Crisis, turning the P/E ratio to levels of 21-22. It is unlikely that FY 2020 reported EPS will beat FY 2019 EPS, therefore I’ll buy the stock at it’s historical average P/E ratio of 20 at 20*5,228 = $104.56, expecting that demand defensive dividend earning stocks will increase.
Invesment idea
Entry price $108
Take profit (or hold 😉) $129,6
Max expected holding period 6 months
Profit 20%
I`ll buy the stock as soon as it hits $108. The financial outlook of PEP remains stable because of a very stable FCF.
PEP can be fall down to 124.43 TLPEP support point 129.95TL is critical . If PEP can not hold on 129.95, Next Target can be 124.43 TL
NASDAQ:PEP
(it is not to be construed as an offer or solicitation for the purchase or sale of any financial instrument or the provision of an offer to provide investment services. Information, opinions and comments contained in this material are not under the scope of investment advisory services)
Pepsi bullflagPepsi is currently in a large upward channel on the weekly timeframe, on the daily timeframe a bull flag can be observed, this will lead to upsides. Other patterns include a diamond bottom reversal after a short term bearish run, a double top, and a double bottom. A great buy long term.
Pepsi to outpace Coca Cola again in 2020Disclaimer, Pepsi max is my favourite drink (apart from water (im drinking one now :P)), In the last 5 years Pepsi has outpaced Coca Cola by almost double (~50% growth), this growth is expected to continue in 2020 as Pepsi becomes more popular among Business and individuals.