Jim Cramer on PepsiCo: Why It's a Buy Despite Recent Drop

PepsiCo's Current Valuation and Potential

• 📌 PepsiCo is currently trading at 18 times earnings, down to $148 per share, a significant drop from its previous valuation.
• 💡 Cramer questions why investors believe the company cannot be improved, highlighting its numerous good properties.
• 🎯 Compared to Coca-Cola's 22 times earnings, PepsiCo's lower multiple suggests an opportunity for growth.

Strategic Opportunities and Concerns

• 💰 With a nearly 4% yield, Cramer believes there are significant changes that can be made within PepsiCo.
• ⚠️ He expresses confusion over the company's acquisition strategy, citing the purchase of good assets like SodaStream and Poppy, but also the gifting of the valuable Rockstar brand to John Fieldy at Celsius.
• 🧩 Cramer suggests that the CEO, Ramon Laguarta, should engage with activist investor Elliott Management to gain fresh perspectives and drive improvements.

Leveraging Activist Investor Insights

• 🤝 Cramer emphasizes the value of listening to activist investors like Elliott, comparing it to seeking consultation from experts.
• 🚀 He argues that engaging with Elliott, who has likely done extensive research, could provide invaluable insights for a fraction of the cost of traditional consulting.
• 🗣️ The advice is to actively use their expertise to understand and implement necessary changes for the company's benefit.