Company name PepsiCo, Inc.
Stock ticker PEP
Live stock price [stckqut]PEP[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Fair
Sales growth Fair
EPS growth Poor
P/E growth Poor
EBIT growth Poor
ANALYSIS
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $46.31
Target stock price (averages with growth) $56.23
Target stock price (averages with no growth) $52.93
Target stock price (manual assumptions) $47.36

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

I picked this up over at iPhoneFreak. It is good to know that one of the major new products that Apple (one of our Good Companies) has a decent profit margin.

A recent report from BroadPoint AmTech analyst Brian Marshal suggests that Apple is going to be making more than $200 for every iPad they are able to sell. The range of profit appears to range from $208 on the $499 model and up to $446 on the $829 model.

“According to a bill of materials (BOM) analysis by Brian Marshall of BroadPoint AmTech, the cost of goods inside Apple’s 16GB Wi-Fi-only iPad totals $270.50. That figure includes a $10 line item dedicated to manufacturing, but doesn’t include another $20 set aside for under-warranty service costs. Adding the latter makes Marshall’s bottom-line total $290.50.”

Also interesting to note, but not surprising is that the display was the most expensive part on the list, coming in at $100. That however can be off-set by the lower price of the Apple A4 chip which was noted as being just $15. Other prices include the 16GB of memory and the aluminum casing both of which were $25 each.

This means the profit margin for the 16GB Wi-Fi only iPad is roughly 42.9%.

In terms of the 16GB Wi-Fi + 3G model, based on the same estimates that model is only costing Apple an extra $16 to make which means they will be making a higher profit on the +3G models. On the 16GB Wi-Fi + 3G model it was noted that the profit margin jumped up to 52%.

I caution you that just because the profit margin on this one product is good, it doesn’t mean the company will maintain as a good company to invest your money. The actions or inactions of its managers are the real drivers of solid performance.