Comments on: Dr Pepper Snapple (DPS) Spinoff

By: Free Morningstar Premium Account — Old School Value

Free Morningstar Premium Account — Old School Value — Thu, 20 Nov 2008 07:09:07 +0000

[...] DPS (Oct 28, 2008) [...]

By: Jae Jun

Jae Jun — Sat, 15 Nov 2008 08:53:11 +0000

thanks for the input. I’ve been watching it, but didn’t feel it was a good choice in its current situation.

I’ll keep a lazy eye on it but Im waiting patiently for a whole bunch of other opportunities.

By: Anonymous11

Anonymous11 — Fri, 14 Nov 2008 16:55:58 +0000

You probably saw the results last Q. I am too lazy to do LTMs so last 9 mo EBITDA is 780 vs 820 for the PY period. Capex was 203 vs. 123. SO EBITDA- CapEx for the period was 577 vs. 697. Int coverage for the period dropped from 3.6x to 2.9x. I have not done any adjustments on some non-recurring items (and I do not think they disclose the fair value of their debt) but I’d be staying away from both the debt and the stock: the business is decelerating. Also, it seems that their intl exposure is in mexican pesos which will likely drop even further from the current levels. Not good either way.

By: Profit from Special Situations - Risk Arbitrage — Old School Value

Profit from Special Situations - Risk Arbitrage — Old School Value — Wed, 12 Nov 2008 17:53:04 +0000

[...] Part 1: Odd Lot Tenders Part 2: Book review on You can be a stock market genius! Part 3: Spinoffs Part 4: A Look at Dr Pepper Snapple [...]

By: Weekly Dividend Investing Roundup - November 1, 2008 » The Dividend Guy Blog

Sat, 01 Nov 2008 11:03:07 +0000

[...] Stock spin offs [...]

By: Jae Jun

Jae Jun — Thu, 30 Oct 2008 17:21:41 +0000

The thing with DPS: they have basically no international exposure. Cabury still owns the international business and DPS was spun off to take over the Americas business of US and Mexico.

By: Mark Perkins

Mark Perkins — Thu, 30 Oct 2008 01:10:39 +0000

actually, now that I think about it that may not be such a big deal bc big growth is going to come from other countries anyway

By: Mark Perkins

Mark Perkins — Thu, 30 Oct 2008 01:07:42 +0000

“the popup graphic is a plugin for wordpress only”

cool. I should have figured that.

I looked at soft drink companies awhile back. You may want to find out recent trends maybe its better now, who knows. But the big shift away from softdrinks to energy drinks, now teas, healthy etc. concerned me. This is from one of my first posts back in 07

“Beverage Digest reported that the total sales volume of soft drinks in the United States fell 0.6 percent in 2006, following a 0.2 percent decline in 2005. The industry sold 10.16 billion cases of soft drinks in 2006, down from 10.22 billion in 2005(reuters.com).”The carbonated soft drink industry has moved from roughly 3 percent growth in the 1990s to modest declines in the last two years,” Beverage Digest reported, saying the estimate included energy drinks, a very fast-growing segment.”

By: Jae Jun

Jae Jun — Wed, 29 Oct 2008 16:36:24 +0000

For those interested, HSNI is another spinoff.

I’ve been watching it closely and it’s now up 80% from its lows but I stayed away because I didn’t fully understand the tv network business.

By: Jae Jun

Jae Jun — Wed, 29 Oct 2008 16:16:06 +0000

@ Mark,

Thanks for the comments. I had pretty much the same concerns and did a side by side comparison but decided to keep the data quite “bare”.

But from going through the numbers it does seem like the market is pricing DPS more like a bottler. The key for me is to find out how true that is.

Oh and the popup graphic is a plugin for wordpress only.

@Nurseb911
I’m still reading the spinoff related reports myself. I also remember that you mentioned you were working on a post between KO and PEP. Interested to read it and see how DPS holds up.

@Anon11
At $22, I’m not exactly convinced that it’s cheap enough as well so it’s on hold for further review at the moment.

I too asked myself a Buffett question. “Would the business of DPS suffer if I had $1bil to compete against it?” I concluded it was a no.

I think if DPS can prove their margins to be stable as well as show they can grow earnings (even though they are only in the Americas), then it could be an excellent alternative.

Thanks for the pointers!