$PEP as a potential anti-cyclical buying opportunity

il y a 6 jours

For conservative anti-cyclical investors seeking annual returns in the 8-12% range, PepsiCo PEP is becoming very interesting

Bollinger Bands & RSI Signal (chart 1):
Late last week, the stock generated my favorite oversold signal at the weekly level

My personal Accumulation Strategy in three tranches:
- First Tranche: Buy at $144
- Second Tranche: Buy at $136 if price dips further
- Third Tranche: Consider buying at $132, supported by 2021 Order Block (Chart 2)


- Potential Crash Scenario: If a market crash occurs, I will buy at ~$110 for final position completion

Fundamental Insights (Chart 3):
- Current earnings yield: 4.7%; Dividend yield: 3.7%
- Dividend growth rate over last decade: 7.5% per year
- PE ratio around 21, low since the Rona crash


Reasons Recent Price Decline:
- Inflation impact: Consumers switching to cheaper alternatives
- USD Strength: Diminishing international profits
- Rising US Government Bond Yields: Competing with dividend stocks, though TLT at 2007 Order Block support suggests possible reversal (Chart 4)


-> Political Influence:
- Trump's stance: High interest rates and inflation, aiming to address these issues could weaken USD, benefiting PepsiCo

Conclusion:
PepsiCo presents a compelling choice for steady, anti-cyclical investments, with technical support, dividend growth, and potential economic policy shifts