The Zacks Analyst Blog Highlights: Google, Zynga, PepsiCo, Family Dollar Stores and The Coca-Cola - Press Releases

By
A A A

For Immediate Release

Chicago, IL - April 19, 2012 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Google Inc.   ( GOOG ), Zynga  ( ZNGA ), PepsiCo Inc.  ( PEP ), Family Dollar Stores Inc.  ( FDO ) and The Coca-Cola Company  ( KO ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday's Analyst Blog:

On Google's New Class C Shares

Google Inc.  ( GOOG ) announced a new class of shares (Class C) that will be issued to existing shareholders at no extra cost. However, the catch here is that there will be no voting rights attached to the shares, thus enabling founders Larry Page and Sergey Brin as well as Executive Chairman Eric Schmidt to retain the majority voting power.

The Mechanics

The value of each share will be split in two on the date this goes into effect (expected June), with half the value allotted to the existing share and the other half to the Class C share. Therefore, the value of each Google share would be halved.

Reason for the Deal

The main reason for creating the new class of shares is to prevent the dilution of the majority voting power, while at the same time halving the value of existing shares. This would enable Page, Brin and Schmidt to take difficult decisions that may not generate immediate profits.

Google has been taking a number of steps to expand and grow the company (the development of Android, for instance). Google's expansion into mobile was essential, but comes with certain problems of its own. Investors with a short-term outlook may not be appreciative of this approach and may get in the way of Google's long-term growth, so say the majority shareholders. 

What This Means for Investors

This is obviously good news for small investors, since they can now invest in Google shares, as the value per share will be halved. For the existing shareholders, it is like getting dividend in the form of stocks instead of cash.

Investors who are there for the long haul may not suffer, given Google's history of growth and innovation. Short-term investors would, however, do best to avoid the shares (evident from the selling activity following the announcement).

Of course, there is always the risk of decisions going wrong and Google wilting against the competition somewhere down the line (however unbelievable that may sound right now).

Conclusion

This could be the new way of doing things in the evolving tech sector. Mark Zuckerberg of Facebook has structured its maiden IPO to maintain tight control over it.  Zynga  ( ZNGA ), the popular gaming company, follows the same path. It is true that Google has been around a while longer, but the company remains at the forefront of technological change.

Google shares currently have a Zacks Rank of #2, implying a Hold rating over the next 1-3 months. Our long-term rating remains Neutral.

Pepsi Inks Deal with Family Dollar

PepsiCo Inc.  ( PEP ) has inked a multi-year agreement with  Family Dollar Stores Inc.  ( FDO ), by virtue of which the latter is responsible for selling Pepsi's beverages.

Family Dollar already offers PepsiCo brands like Gatorade, Frito-Lay and Quaker products. The new agreement will also allow Family Dollar to offer products like Mountain Dew and Sierra Mist sodas, Aquafina water and Lipton tea.

Management at Family Dollar promises that the new agreement with PepsiCo will not affect the existing agreement with  The Coca-Cola Company  ( KO ).

Last November, Papa John's Pizza ended its long-time relationship with Coca-Cola and started serving Pepsi beverages in U.S. stores with effect from early 2012.

Coca Cola struck back and bagged an agreement with  Dunkin' Brands Group Inc. , under which more than 9,400 Dunkin' Donuts and Baskin-Robbins shops across the U.S. switched to offering Coca-Cola beverage instead of Pepsi products. The deal includes juices, energy drinks and bottled water along with Diet Coke, Coca-Cola and Sprite.               

Management of Family Dollar believes that the new deal with PepsiCo will allow them to provide their customers more choice and variety. PepsiCo opines that Family Dollar is a good partner and the opportunity of offering their products through the grocery chain will give more exposure to the beverage company.

Our Recommendation

We currently have a Neutral recommendation on PepsiCo on a long-term basis. Further, the stock carries a Zacks #3 Rank (short-term Neutral rating).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515 .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518 .

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com

http://www.zacks.com


 
FAMILY DOLLAR ( FDO ): Free Stock Analysis Report
 
GOOGLE INC-CL A ( GOOG ): Free Stock Analysis Report
 
COCA COLA CO ( KO ): Free Stock Analysis Report
 
PEPSICO INC ( PEP ): Free Stock Analysis Report
 
ZYNGA INC ( ZNGA ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: FDO , GOOG , KO , PEP , ZNGA

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

64,159,633
  • $100.86 ▼ 0.76%
63,552,623
  • $16.71 ▼ 0.18%
60,140,251
  • $42.71 ▲ 0.38%
52,385,870
  • $17.51 ▲ 5.86%
50,329,585
  • $13.75 ▲ 29.84%
43,337,551
  • $16.16 ▼ 1.40%
40,126,911
  • $3.605 ▲ 0.56%
39,836,742
  • $3.81 ▼ 2.56%
As of 9/16/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com