TLDR
- PepsiCo stock has fallen 30% since mid-2023 while Coca-Cola rose 30%, creating a potential buying opportunity
- Apple shares are down 20% from late-2024 highs due to slow AI adoption and China tariff concerns
- Markel Group operates as a smaller version of Berkshire Hathaway with specialty insurance and diverse investments
- PepsiCo offers a 4.3% dividend yield compared to Coca-Cola’s 2.8% after 53 consecutive years of increases
- Apple’s AI-powered Siri may not launch until 2027, but early positioning could benefit long-term investors
Three stocks are catching attention from investors looking for value opportunities in today’s market. PepsiCo, Apple, and Markel Group each face different challenges but offer potential upside for patient investors.
PepsiCo (PEP) has struggled significantly compared to rival Coca-Cola over the past two years. The beverage and snack company’s stock has dropped more than 30% since mid-2023 while Coca-Cola shares climbed over 30% in the same period.
The company’s challenges stem from inflation pressures on its production facilities. Unlike Coca-Cola, which uses third-party bottlers, PepsiCo owns most of its manufacturing operations and bears the full cost of rising input prices.
Recent financial results show continued headwinds for the company. Revenue for the final quarter of 2024 came in below expectations for the third consecutive quarter. First-quarter revenue of $17.92 billion barely topped analyst estimates of $17.77 billion.
Organic revenue grew just 1.2% year-over-year while net revenue actually declined 1.8%. Per-share earnings also missed expectations, forcing management to lower full-year profit guidance by 3% for 2025.
Supply Chain Restructuring Offers Hope
PepsiCo is actively working to address these operational challenges. The company is restructuring its supply chain and seeking alternative sources for key inputs. Management is also pursuing tariff exemptions for certain products.
The stock’s decline has boosted its dividend appeal significantly. PepsiCo now offers a forward dividend yield of 4.3% compared to Coca-Cola’s 2.8%. The company has raised its dividend for 53 consecutive years with no plans to break that streak.
Apple (AAPL) presents a different type of value opportunity after falling 20% from its late-2024 peak. The technology giant faces two main pressures affecting investor sentiment.
Consumer response to Apple’s artificial intelligence features has been lukewarm since their introduction. The company entered the AI space later than competitors and its initial offerings haven’t generated expected excitement.
Tariff concerns also weigh on the stock since about half of Apple’s revenue comes from iPhone sales. Industry analysis suggests current tariffs could increase iPhone prices by 40%. An all-American manufactured iPhone could potentially cost $3,500 according to analyst estimates.
Long-Term AI Strategy Takes Shape
Apple’s AI strategy requires a longer-term perspective than many investors initially expected. The company hasn’t released all planned AI features yet, and current offerings admittedly need improvement. The next-generation AI-powered Siri may not launch until 2027.
This timeline could actually benefit Apple by allowing iPhone hardware to become more capable of handling intensive AI tasks. The AI-powered digital assistant market is projected to grow at 24% annually through 2034 according to research firm Precedence Research.
The third investment opportunity comes from Markel Group (MKL), a lesser-known company operating similarly to Berkshire Hathaway. With a $25 billion market cap, Markel combines specialty insurance operations with diverse investment holdings.
The company owns privately held businesses including Brahmin handbags, Lansing building products, and Buckner crane manufacturing. It also holds public stock positions in major companies like Alphabet, Visa, Deere, and Home Depot.
Markel generates cash through insurance operations and deploys capital when attractive investment opportunities arise. The strategy mirrors Berkshire Hathaway’s approach on a smaller scale. Recent criticism has focused on subpar deal-making and limited technology adoption, issues management is addressing.
Warren Buffett’s planned departure from Berkshire Hathaway early next year creates potential opportunities for similar investment vehicles. Markel currently trades at approximately 10 times last year’s net income despite recent stock gains.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
