) and Procter & Gamble (
) shares rose after the consumer giants reported quarterly results,
lifting sector exchange traded funds that count the stocks as top
At the end of the first quarter, Procter & Gamble was the
largest holding in
Vanguard Consumer Staples ETF (NYSEArca: VDC)
at 12.4%. Pepsi was number five in the ETF at 7%.
Pepsi shares were up nearly 3% in afternoon trading
Pepsi "delivered quite solid results in the first quarter, and
if it can sustain its momentum over the next few quarters, we think
our investment thesis-that the multiple gap with Coca-Cola (
) should close-may soon play out," said Morningstar's Philip Gorham
in a report on the earnings.
"Pepsi appears on track to meet our estimate of mid- to
high-single-digit earnings growth in 2011, and we are maintaining
our $76 fair value estimate and long-term outlook," he added.
"Trading at 15 times 2011 earnings, Pepsi is an undervalued stock
in an industry that could provide a safe haven if investors turn
defensive over the next few months, in our opinion."