On CNBC’s Squawk Box, Jim Cramer said the UBS upgrade of PepsiCo (PEP) was worth watching, and added that CEO Indra Nooyi has created tremendous value for the company, whose stock is up 9% this year, while competitor Coca-Cola (KO) has declined 4.5% so far in 2014. PepsiCo is “one of the best performing packaged goods companies out there, ” said Cramer. One thing helping the stock is the involvement of activist manager Nelson Peltz, who is encouraging Nooyi to break PEP up into a beverage and a snacks segment. Cramer thinks the combination is working for Pepsi, and instead of going after CEOs like Nooyi who are creating value, he should “go after losers like Coca-Cola” who are “overpaid, fat and happy not doing anything.”
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Cramer doesn’t think the standoff in Russia is hurting the markets particularly, or at least not yet, and while the Russian troops are budging, Wall Street sees it as a lull during which it can pay attention to earnings. However, the very low volume of trading means that “everything is going to magnified.”
Priceline (PCLN) reported earnings and Monday and it was the usual routine he has seen with this company; management beats estimates but gives conservative guidance, the shorts and the sellers come in and when management paints a strong picture on the conference call, then the stock rallies.
On the news that Rich Kinder consolidated the MLPs under the roof of Kinder Morgan into one company, Cramer suggested people on the street wait and hear what Rich Kinder has to say about it. Cramer is supportive of the move, thinks it will create value, although many people thought Kinder “would never do it. People felt he wasn’t doing a good job, but this is a mistaken short.”