Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, December 3, 2010

Article Excerpt

PEPSICO INC., $65.17, New York symbol PEP, continues to expand internationally. Right now, it gets 45% of its sales from outside the U.S. This week, the company agreed to buy Wimm-Bill-Dann Foods OJSC (New York symbol WBD). Wimm-Bill-Dann is a leading producer of dairy products, fruit juices and baby food in Russia. If Russian regulators approve, PepsiCo will pay $3.8 billion for 66% of Wimm-Bill-Dann. It will then offer to buy the remaining 34%. In all, PepsiCo will pay roughly $5.4 billion. To put this cost in context, the company earned $2.0 billion, or $1.22 a share, in the three months ended September 4, 2010. PepsiCo already has some operations in Russia, so combining plants and distribution networks should save it $100 million a year by 2014. Wimm-Bill-Dann is a market leader, which helps offset the risk of expanding in Russia. PepsiCo’s expertise will also help Wimm-Bill-Dann develop profitable new foods for the fast-growing Russian market. PepsiCo is a buy. MOTOROLA INC., $8.24, New…