StockAnalysis-NEW-PBG

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					Analysts: Christina Wagner                                      Industry/Stock: Beverages Industry/
            & Kelly Shea                                                        Pepsi Bottling Group Inc. (PBG)

                                          Pepsi Bottling Group Inc. (PBG): Buy
     Near 52 week high, but we think that it will continue to go up as we are expecting a recession.
     Small-Cap, Value stock, which fits our criteria.
     Has had earning surprises consistently every quarter for the past two years.
     Overall, it ranks best by price multiples out of all the companies in its industry and its industry is expected to do
      even better as the economy falls.




          Key Statistics (11/23/07)                                                      Key Ratios
Price                                 $41.72                                                PBG          Industry Avg.

Beta                                     .70                        P/E - Fwd             17.19               24.62
                                                                    PEG                    1.84                2.32
Market Cap                             9.2 B
                                                                    Price/Book             3.90                6.91
52 Week Range                   30.13 – 43.38
                                                                    Price/Sales             .69                4.03
EPS (ttm)                               2.49
                                                                    Price/Cash
                                                                                           7.44               19.05
                                                                    Flow
                  Key Executives
Mr. John T. Cahill, 49
Executive Chairman of the Board
Mr. Eric J. Foss , 48                                                           Recent Developments
CEO, Pres                                                            11/06- The Pepsi Bottling Group receives the Green
Mr. Alfred H. Drewes , 51                                             Power Leadership Award by the Environmental
CFO and SVP                                                           Protection Agency showing that they are concerned
                                                                      for the economy and willing to make an effort to fix it.
Mr. Yiannis Petrides , 49                                            10/03-Pepsi Bottling Group increases revenues by
Pres of PBG Europe                                                    7.8% and free cash flow increased 73% from the
Mr. Robert C. King , 49                                               same period last year. They also boosted their
Pres of PBG North America                                             yearly outlook to earnings between $2.15 and $2.18
                                                                      compared to their previous expectations of earnings
Mr. Pablo Lagos , 51                                                  between $2.02 and $2.07.
Pres and Gen. Mang. of PBG Mexico
Mr. Yiannis Petrides, 48
Pres. Of PBG Europe
Mr. Steven M. Rapp, 53
SVP, General Counsel, and Secretary
Analysts: Christina Wagner                                    Industry/Stock: Beverages Industry/
            & Kelly Shea                                                      Pepsi Bottling Group Inc. (PBG)




Industry                                  Industry                            Industry Analysis
                             PBG
Comparison                                                    Overview
Oper. Profit Margin         8.33%           20.31%              Non- Alcoholic Beverages are in the consumer
                                                                 non-cyclical sector.
                                                                Industry companies sell Non-Alcoholic
Net Profit Margin           4.38%           16.55%               beverages such as soda, juice and water.
                                                                 Companies in this industry also include the
                                                                 bottlers of these products.
ROE                        24.96%           31.20%            Evaluation
                                                                Products are sold practically everywhere you
                                                                 go.
ROA                         5.34%          16.02%               Industry sales are driven by needs of
                                                                 consumers.
                                                                Economy is slowing down.
Asset Turnover              1.03x            .98x               Higher gas prices and the slumping housing
                                                                 market will not undermine the spending of
                                                                 income on beverages.
Return on                                                     Summary
                            6.09%           22.65%
Investment                                                      Despite the slowing economy and the rising
                                                                 gas prices, consumers always buy beverages.
                                                                 Therefore, this industry will be doing
                                                                 exceedingly better than the rest of the market
                                                                 right now.


                                                 Stock Analysis
Overview
  Pepsi Bottling Group is involved in the manufacturing, selling, and distributing Pepsi-Cola
     and related beverages.
  Its customers are chain foodstores, supercenters, mass merchandisers, chain drug stores,
     club stores, and military bases, as well as independently owned shops and foodservice
     businesses.
  Company sells its products through direct store distribution system, wholesalers, and third-
     party distributors primarily in the United States, Mexico, Canada, Spain, Russia, Greece,
     and Turkey.
Evaluation
  Beta of .70 may help balance out the volatility of other high beta stocks in the portfolio.
  Lower Valuation multiples show that the stock is undervalued compared to other
     companies in the industry.
  Has been trending upwards since March and has outperformed the S&P.
  PEG is close to the industry average.
Summary
  Pepsi Bottling Group Inc. is a low beta stock that outperforms other stocks in its industry.
     We believe that it will continue to rise due to the fact that it is a staple and will therefore
     not be affected by the expected recession.
  The company is experiencing high growth rates through expansion and penetration in new
     markets such as Mexico, Russia, and Turkey.

                                                  Important Disclaimer
 Student member of the University of Rhode Island Ram Fund class created this report, which intends to provide
 potential employers and other interested parties an example of the skills, knowledge and abilities of Ram Fund
 students. Members of the Ram Fund are not registered investment advisors, brokers or officially licensed financial
 professionals. The investment advice does not represent an offer or solicitation to buy or sell any of the securities
 mentioned. This report is not a complete compilation of data, and its accuracy is not guaranteed. From time to time,
 the University of Rhode Island, its faculty, staff, and student body, or the Ram Fund may hold
 a financial interest in the companies mentioned in this report.

				
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