Got 401K? Part III - in 3D
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Pepsico (NYSE: PEP), recently announced better results than what were expected. Much like going into a test hoping you at least get a “C”, yet you somehow manage to escape with a “B”. The company also announced plans to increase dividends and share buybacks in the current year. Fourth quarter income rose, but they forecast a somewhat downbeat 2012. Oh, and they also announced they will be cutting well over 8,000 jobs, roughly 3% of their workforce, so Happy New Year. You have to take your eyes off the job cuts.
Like at least 8.3% of you, probably, I have fallen victim to the dreaded axe in my career lifetime (surprising, right?). It’s not much fun, I know. But I am fairly certain Pepsi will provide a soft landing for those unfortunate folks, barely leaving enough room for their dividend increases and share buybacks. See, unfortunately, that’s where most people will focus their attention. And I get it, I truly do. Nobody likes to see workforce reduction, people losing jobs, moving in with their parents and their musty old homes that are freezing cold in the winter and sweltering hot in the summer because they grew up with memories of the Great Depression and you are forced to eat leftovers 3 times a week. The stories provide the inspiration for several cancelled sitcoms.
But if you take your eyes away from the bleeding headlines (which I know you people love), you should focus your attention on the buybacks and the increased dividends. Pepsi already offers a thirst-quenching 3% dividend yield and they are going to increase the dividend payout? That tastes better than a flat diet Pepsi. And with the gloomy forecast for 2012, well, even the most challenged investor has experienced what happens when the bar is set so low that you can’t help but surpass the expectations of getting a “C” on that test. Most of us somehow manage to get a “B” and everyone else playing gets a medal for merely participating. So give Pepsi a look on the pullback (currently around $64, intraday 2/9/12).
Now for those of you that were part of the workforce weight loss plan, you lost your 401K matching, and now your 401K is just sitting there. You received a little severance; maybe you cut a few lawns or do some roofing to supplement your unemployment. It’s cool, I get it. I am suggesting that you take a thin slice of your take, just enough so your stomachs aren’t in knots and you’re chugging M.O.M. just before the opening bell every morning. I think you should direct a small amount of attention in the direction of 3D Systems Corporation (NYSE: DDD).
What do I say to my mass of truly loyal followers? An hour a week per stock, right? Well, 3D reports earnings this month(2/23/12), and the call may take a bit longer, because I could very well be on it, and you know how much I like to talk (type). The company develops and markets three-dimensional printers which basically convert data from computer-aided design (CAD), software to produce physical objects. If you have not heard about this company, I want you to start studying because there will be a test at the end of the year, and I don’t want you to merely skate by, okay? The company markets to a vast array of manufacturers, from automotive and aerospace to medical and dental. As long as people keep buying cars and getting older and brushing their teeth, well, there may just be a market for these guys. The company has had a rather nice run over the past 3 months, and it currently trades around the middle of their 52-week range of $13-$27, around $20.65 (intraday, 2/9/12).
With a healthy percentage of folks feeling the tightening of corporate belts, it’s of paramount importance that we start to assume the responsibility for our own investing practices. And as long as people keep getting laid off, which they will, we need to be more aware of what potential lies beyond our day-to-day work grind. I always say, it doesn’t take much to get the ball rolling, and given the prospect that a lot more than 8.3% won’t enjoy an employer-managed 401K, it’s time to start studying and get on the honor roll.
Motley Fool newsletter services recommend 3D Systems and PepsiCo. The Motley Fool owns shares of 3D Systems and PepsiCo. kmet312 has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
