Shares of Pepsico and Dr Pepper Snapple have outperformed Coca-Cola the past two years. Stifel's Chad Morganlander says there's more pop left in those stocks.
Choppy trading with indices weeping north and south of the breakeven line what is the makes sense all this Chad warm Atlantic. He's a portfolio managers Stiefel. Welcome Chad that. What's behind this direction with training we're seeing this morning I think it all started yesterday when he got the inventories numbers from the oil sector. As well as a rumor that the Chinese or suggestion from the PB SC for the additional fiscal stimulus. Will be happening course suggestion. For China that have been on the market and I believe investors digesting that moved it waiting for. Why believe also the G-20 meeting is going to be kicking off shortly. Investors want to see if there's going to be an additional fiscal commendation. From the the develops markets as well as from China. And as well if there's going to be any monetary positioning or at least a signal of monetary stimulus. Stocks had a positive start today sort ignoring the initial drop in oil and at the drop in the Chinese market. Are we start to see a possible breakup of a correlation that we instinct. Believe so I say you look at the overall financial system is still trying to adapt to these sobering effect that global growth. Is decelerating. And as we all know deceleration global growth came from the emerging markets which contributed to roughly 75%. Of global growth over the last decade so what we're having here is justice readjustment period within commodities market. The oil markets and their earnings are gonna fall over the course of the next twelve to eighteen months ended we had Citigroup I guess coming out this economic forecast saying that the global growth will be slowing possibly what they see as the recession. Exactly and that's really alarming. Investors because you have global treaty issues. As well as weird do you think earnings going to be here in the United States as well this is Leo as with the European markets. We believe that there is gonna be continuation deceleration. We do not see recession. Going forward for this year yes the possibility of it has increased moderately. But yet we still seek growth with the jobs market as well as within the private sector. They'll start with two stocks that you like. Doctor pepper snapple and PepsiCo and both those stocks that outperform. Cool coal over the last two years but it's not industry a lot of us that particular line got caloric sodas and all all white healing kept. What he's. What do you see is losing OK well first thing to general fanatic we believe is that little volatility stocks will out perform high multiple high volatility stocks really well. Of course the last three years. When you look at Coca-Cola. You have a company. That actually seems to be for the toppling growth is really not great and operating margins are not improving as much with doctor pepper patsy. It's quite the opposite. You have growth rates with the top line of point 23%. As well as operating margin expansion hopeful that these companies. Hence the reason why you'd seen tremendous performance. Of its is a product lineup it's. This product lineup has has been there for doctor pepper it's more every growth by acquisition story able to hop in the small. Brands and absolutely. Take advantage of that with operating margin expansion the management team there. It's quite sturdy we believe that stuff will continue to batters in the US and 500 but one has to take three to five year time horizon. When investing and talk to her and introduced an uphill putts go practice for about ten years of that thanks for joining us thank you. Are affected Chad Morgan Lander Stiefel I'm Fred Katayama and this is sort.