Is Keurig Dr Pepper (KDP) Trading at a Discount?
In its second quarter 2025 investor letter, Oakmark Global Fund highlighted stocks such as Keurig Dr Pepper Inc. (NASDAQ:KDP). Keurig Dr Pepper Inc. (NASDAQ:KDP) owns and distributes beverages and single serve brewing systems. The one-month return of Keurig Dr Pepper Inc. (NASDAQ:KDP) was 1.19%, and its shares gained 1.84% of their value over the last 52 weeks. On July 14, 2025, Keurig Dr Pepper Inc. (NASDAQ:KDP) stock closed at $33.26 per share, with a market capitalization of $45.173 billion.
Oakmark Global Fund stated the following regarding Keurig Dr Pepper Inc. (NASDAQ:KDP) in its second quarter 2025 investor letter:
"Keurig Dr Pepper Inc. (NASDAQ:KDP) is one of North America's leading beverage companies, with dominant positions in single serve coffee and flavored soft drinks. The soft drink portfolio has an enviable track record of volume growth and market share gains. We believe this strong performance can continue well into the future thanks to favorable demographic trends, brand strength and its unique distribution network. Recently, the stock price came under pressure due to fundamental weakness in the Keurig coffee division. At-home coffee consumption normalized as people returned to work, while price hikes are also weighing on demand. We believe these industry wide challenges will prove transitory as coffee remains a popular beverage across demographics. Keurig is poised to capitalize on this demand with the largest installed base of single-serve brewers and ample runway to further increase household penetration. At the current quote, the market as cribes minimal value to Keurig. We were happy to purchase shares in this above-average business that is trading at a discount to the market, other bever age peers and private market transactions."
A conveyor belt filled with assorted K-Cup pods, ready for packaging.
Keurig Dr Pepper Inc. (NASDAQ:KDP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Keurig Dr Pepper Inc. (NASDAQ:KDP) at the end of the first quarter, which was 39 in the previous quarter. While we acknowledge the potential of KDP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Keurig Dr Pepper Inc. (NASDAQ:KDP) and shared the list of best consumer goods stocks billionaires are quietly buying. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
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Los Angeles Times
a few seconds ago
- Los Angeles Times
How the E.U. trade deal wards off more escalation but could raise costs for companies and consumers
U.S. President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal that imposes 15% tariffs on most European goods, warding off Trump's threat of a 30% rate if no deal had been reached by Aug. 1. The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country. Here are some things to know about the trade deal between the United States and the European Union: Trump and von der Leyen's announcement, made during Trump's visit to one of his golf courses in Scotland, leaves many details to be filled in. The headline figure is a 15% tariff rate on about 70% of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It's lower than the 20% that Trump initially proposed, and lower than his threats of 50% and then 30%. The remaining 30% is still open to further decisions and negotiations. Von der Leyen said that the two sides agreed on zero tariffs on both sides for a range of 'strategic' goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products and some natural resources and critical raw materials. Specifics were lacking. She said that the two sides 'would keep working' to add more products to the list. Additionally, EU companies would purchase what Trump said was $750 billion (638 billion euros) worth of natural gas, oil and nuclear fuel over three years to replace Russian energy supplies that Europe is seeking to exit in any case. Meanwhile, European companies would invest an additional $600 billion (511 billion euros) in the U.S. under a political commitment that isn't legally binding, officials said. Brussels and Washington will shortly issue a joint statement that frames the deal but isn't yet legally binding, according to senior officials who weren't authorized to be publicly named according to European Commission policy. The joint statement will have 'some very precise commitments and others which will need to be spelled out in different ways,' a senior European Commission official said. EU officials said that the zero tariff list would include nuts, pet food, dairy products and seafood. Trump said that the 50% U.S. tariff on imported steel would remain. Von der Leyen said that the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas — that is, set amounts that can be imported, often at a lower rate or tariff-free. Trump said that pharmaceuticals weren't included in the deal. Von der Leyen said that the pharmaceuticals issue was 'on a separate sheet of paper' from Sunday's deal. And von der Leyen said that when it came to farm products, the EU side made clear that 'there were tariffs that could not be lowered,' without specifying which products. The 15% rate removes Trump's threat of a 30% tariff. But it effectively raises the tariff on EU goods from 1.2% last year to 17% and would reduce the 27-nation's gross domestic product by 0.5%, said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics. Higher tariffs, or import taxes, on European goods mean sellers in the U.S. would have to either increase prices for consumers — risking loss of market share — or swallow the added cost in terms of lower profits. The higher tariffs are expected to hurt export earnings for European firms and slow the economy. Von der Leyen said that the 15% rate was 'the best we could do' and credited the deal with maintaining access to the U.S. market, and providing 'stability and predictability for companies on both sides.' German Chancellor Friedrich Merz welcomed the deal which avoided 'an unnecessary escalation in trans-Atlantic trade relations' and said that 'we were able to preserve our core interests,' while adding that 'I would have very much wished for further relief in trans-Atlantic trade.' Senior French officials on Monday criticized the accord. Strategy Commissioner Clément Beaune said that the deal failed to reflect the bloc's economic strength. 'This is an unequal and unbalanced agreement,' he said. 'Europe didn't wield its strength. We are the world's leading trading power.' While the rate is lower than threatened, 'the big caveat to today's deal is that there is nothing on paper, yet,' said Carsten Brzeski, global chief of macro at ING bank. 'With this disclaimer in mind and at face value, (the) agreement would clearly bring an end to the uncertainty of recent months. An escalation of the U.S.-EU trade tensions would have been a severe risk for the global economy,' Brzeski said. 'This risk seems to have been avoided.' Asked if European carmakers could still sell cars at 15%, von der Leyen said the rate was much lower than the current 27.5%. That has been the rate under Trump's 25% tariff on cars from all countries, plus the preexisting U.S. car tariff of 2.5%. The impact is likely to be substantial on some companies, given that automaker Volkswagen said that it suffered a 1.3 billion-euro ($1.5 billion) hit to profits in the first half of the year from the higher tariffs. Mercedes-Benz dealers in the U.S. have said they were holding the line on 2025 model year prices 'until further notice.' The German automaker has a partial tariff shield, because it makes 35% of the Mercedes-Benz vehicles sold in the U.S. in Tuscaloosa, Alabama, but the company said that it expects prices to undergo 'significant increases' in coming years. Before Trump returned to office, the U.S. and the EU maintained generally low tariff levels in what is the largest bilateral trading relationship in the world, with around 1.7 trillion euros ($2 trillion) in annual trade. Together the U.S. and the EU have 44% of the global economy. The U.S. rate averaged 1.47% for European goods, while the EU has averaged 1.35% for American products, according to the Bruegel think tank in Brussels. Trump has complained about the EU's 198 billion-euro ($232.5 billion) trade surplus in goods, which shows Americans buy more from European businesses than the other way around, and has said that the European market isn't open enough for U.S.-made cars. However, American companies fill some of the trade gap by outselling the EU when it comes to services such as cloud computing, travel bookings and legal and financial services. And about 30% of European imports are from American-owned companies, according to the European Central Bank. McHugh and McNeil write for the Associated Press.
Los Angeles Times
a few seconds ago
- Los Angeles Times
Trump says he's shortening the 50-day deadline for Russia to end the war in Ukraine
EDINBURGH, Scotland — President Trump said Monday he intends to shorten the 50-day deadline he gave Russian President Vladimir Putin to reach a deal that ends the three-year war in Ukraine, after Russia continued to bombard Ukrainian cities. Russia fired an overnight barrage of more than 300 drones, four cruise missiles and three ballistic missiles, the Ukrainian air force said. Trump said two weeks ago he would implement 'severe tariffs' on Russia unless a peace deal is reached by early September, as he expressed exasperation with Putin over the bombardment of Ukrainian cities amid the Republican president's attempts to stop the fighting. Trump said he would now give Putin 10 to 12 days from Monday, meaning he wants peace efforts to make progress by Aug. 7-9. The plan includes possible sanctions and secondary tariffs targeting Russia's trading partners. The formal announcement would come later Monday or on Tuesday, he said. 'No reason in waiting,' Trump said of the shorter timeline. 'We just don't see any progress being made.' Putin has 'got to make a deal. Too many people are dying,' Trump said during a visit to Scotland. There was no immediate response from Russia. Trump repeated his criticism of Putin for talking about ending the war but continuing to bombard Ukrainian civilians. 'And I say, that's not the way to do it,' Trump said. He added, 'I'm disappointed in President Putin.' Asked at a news conference about a potential meeting with the Russian leader, Trump said: 'I'm not so interested in talking anymore.' Still, he voiced some reluctance about imposing penalties on the Kremlin, saying that he loves the Russian people. 'I don't want to do that to Russia,' he said, but he noted how many Russians, along with Ukrainians, are dying in the war. Ukraine has urged Western countries to take a tougher line with Putin. Andrii Yermak, the head of Ukraine's presidential office, thanked Trump for shortening the deadline. 'Putin understands only strength — and that has been conveyed clearly and loudly,' Yermak said on Telegram, adding that Ukrainian President Volodymyr Zelensky shared the sentiment. A Russian drone blew out the windows of a 25-story residential building in the Darnytskyi district of Kyiv, the head of the city's military administration, Tymur Tkachenko, wrote on Telegram. Eight people were injured, including a 4-year-old girl, he said. The attack also started a fire in Kropyvnytskyi, in central Ukraine, local officials said, but no injuries were reported. The main target of the Russian attack was Starokostiantyniv, in the Khmelnytskyi region of western Ukraine, the air force said. Regional authorities reported no damage or casualties. Western Ukraine is on the other side of the country from the front line, and the Ukrainian military is believed to have significant airfields as well as arsenals and depots there. The Russian Defense Ministry said its forces carried out an overnight strike with long-range, air-launched weapons, hitting a Ukrainian air base along with an ammunition depot containing stockpiles of missiles and components for drone production. Weissert writes for the Associated Press. AP journalist Illia Novikov in Kyiv, Ukraine, contributed to this report.
Los Angeles Times
a few seconds ago
- Los Angeles Times
Silicon Valley's $4 billion gamble on defense manufacturing
Every month Neros Inc. makes hundreds of drones designed to drop warheads on adversaries. By the end of the year, the company wants its new Southern California factory to crank out 10,000 per month. Never mind that Neros only has orders for 36,000 of them for Ukraine. 'If we wait until a buyer comes knocking and asks for a certain quantity of drones built at a certain pace, it will be too late,' said Chief Executive Officer Soren Monroe-Anderson. 'The supply chain is the hard part. We are putting in the work now' to be able to produce weapons later, he said. Neros is one of a growing number of startups betting on the great reindustrialization of America's defense base. Dozens of other Silicon Valley industrial companies are building out large manufacturing operations, at the same time the Trump administration pushes to bulk up defense spending. A rough tally of plans by just a few of the better-known startups in the industry shows they're spending a collective $4 billion and counting over the next few years on shipyards, factories and manufacturing tools and equipment. Weapons maker Anduril Industries Inc. and autonomous ship builder Saronic Technologies are undertaking the largest projects, investing $1 billion and $2.7 billion respectively to build software-operated manufacturing megafactories, capable of producing tens of thousands of AI-powered autonomous ships, aerial drones, fighter jets and other weapons. They're joined by other venture-backed players like factory startup Hadrian, drone and defense company Shield AI, satellite firm Astranis Space Technologies Corp., and industrial parts and manufacturing upstart Divergent Technologies Inc. This month, Varda Space Industries Inc., backed by investors like Peter Thiel's Founders Fund, raised $187 million to open a lab in California to bolster its drugmaking efforts and frequency of its missions to space. Meanwhile, other tech leaders have even grander ambitions. The developers of the billionaire-backed futuristic community California Forever are planning to build the largest defense-focused industrial manufacturing park in the US that will also include a shipyard near San Francisco. Another project, Frontier Valley, hopes to construct 5 million square feet of Bay Area manufacturing space. 'This new age of defense is about rapid manufacturing,' said Lux Capital general partner Brandon Reeves, whose firm has backed Anduril, Varda and Hadrian. 'Everyone is trying to get to scale.' The efforts could help address a glaring problem in American national security: the slow speed of US weapons manufacturing compared with China. In most modern-day wartime scenarios, the country that's able to quickly produce the most autonomous drones, ships and other hardware has a vast advantage, meaning America is poorly positioned. VCs and startups have been vocal about this problem — Joe Lonsdale has invoked the critical role of World War II-era production efforts, and Andreessen Horowitz adviser Matt Cronin has called the issue an 'existential threat' to US national security. But building out industrial infrastructure is a gamble for venture investors who are spending large sums to expand production with no guarantee that famously hard-to-get defense contracts will materialize. VCs have plowed more than $70 billion into the top 100 defense startups, which have so far secured about $29 billion total in contracts, according to a July report by the Silicon Valley Defense Group. 'It's a chicken-and-the-egg problem,' said General Catalyst Managing Director Paul Kwan, an investor in Anduril, Saronic and more than a dozen other defense startups planning to expand in advance of contract awards. 'Private capital has stepped up. That's absolutely the investment risk we are taking.' While startups are making inroads — the Defense Department more than doubled its annual spending on startups in 2024 — the group still represents less than 1% of the overall defense budget, per the report's tally. By far, the bulk of defense spending goes to traditional contractors, specifically Lockheed Martin Corp., RTX Corp., Boeing Co., Northrup Grumman Corp. and General Dynamics Corp. Known as the 'Big Five,' these firms have been around for decades and have deep Washington relationships. And while these legacy companies have the benefit of well-established supply chains and large-scale production facilities, many in Washington and Silicon Valley have complained that they move too slowly, weighed down by layers of bureaucracy that affect how quickly they can innovate. Startups can boast of their more nimble structures and up-to-the-minute technology, but they usually lack a track record, so it's often difficult for them to break through the complicated world of Washington procurement that prioritizes reliability. 'The market is telling these companies to grow — and investors are backing them. But the Department of Defense has not yet built the contracting infrastructure or funding flexibility to meet the moment,' the Silicon Valley Defense Group writes. The result could be a 'two-speed ecosystem' where private capital continues to grow while public funds remain tied to legacy processes and contractors. 'Ultimately, this is not sustainable,' the authors say, 'and we risk ecosystem momentum collapse.' One marquee player in defense tech is Epirus Inc., which makes electronic weapons capable of zapping drones out of the sky. The company is prepared to spend as much as $50 million to build a new facility in Oklahoma this year to make the high-powered microwave devices that can identify and disable hostile drones. CEO Andy Lowery says he will be able to increase production by 2027 to as many as 100 units a year from the current handful of prototypes now in use. But whether he'll be able to sell those units once he makes them is less clear. 'We know this is going to be needed, but I'm scared. Where's the paperwork?' Lowery said. 'For me to put a shovel in the ground I want the order.' The biggest companies in the industry have already decided that building big manufacturing facilities is worth the risk. For example, Anduril, which closed a $2.5 billion funding round last month, is in the process of building out a sprawling megafactory in Ohio. Called Arsenal-1, the complex is the size of 87 football fields. It will include at least nine buildings and ultimately employ around 4,500 people manufacturing nearly all of Anduril's drones, missiles, mini-fighter jets and other products. Arsenal-1 is intended to be the first of several such large-scale undertakings in the coming years, the company has said, as it works toward building advanced manufacturing systems designed to be quickly replicated in other US and allied locations. Meanwhile, Saronic, which raised $600 million earlier this year, is spending $2.5 million to build a modern shipyard it's calling Port Alpha and an additional $200 million to renovate an existing shipyard. Saronic CEO and co-founder Dino Mavrookas said his company is 'on a mission' to bring back shipbuilding on a scale not seen since World War II, and is seeking to double its employee count to 700 by the end of this year. So far, Saronic has collected just $33 million in contracts from the federal government, according to data compiled by Bloomberg Government. But with a new partnership and at least three new ship products this year, Mavrookas expects more. Shipbuilding, like rocket factory construction, could help the US meet a critical need. America builds less than 1% of the world's new ships per year, while China produces roughly half. The issue is urgent enough that the Trump administration recently issued an executive order calling for more construction. Companies like Saronic could play a key role in advancing naval technology while helping the US catch up to potential adversaries. However, even if the orders come in, there's no guarantee that new Silicon Valley technology will play the role technologists hope it will. As more companies hustle to lock down US supply chains, design modern factories and staff assembly lines in anticipation of increased demand — they have yet to prove new technology will work as promised, or that the new factories can handle a massive production surge. 'They are untested. I have an open question about whether these companies can actually scale production of these new weapons systems,' said Becca Wasser, defense deputy director for the Center for a New America Security. 'They say they can do it, but mass production is really, really hard.' Moving fast in defense manufacturing requires many pieces of a production puzzle to come together at the same time. Neros, which is backed by Founders Fund and Sequoia Capital, is struggling to find enough rocket motors from a US-based supplier to produce 10,000 drones a month. After working for months to expand production, the startup has located a monthly supply of only around 3,000 motors so far — enough to fulfill its current orders, but well short of its ultimate goal of 1 million a year. Despite the obvious challenges that come with manufacturing, swathes of Silicon Valley appear undeterred. Y Combinator Managing Director Jared Friedman said a combination of patriotism and a sense of opportunity has galvanized many of the young entrepreneurs that come through the popular tech accelerator. Where software once was the obvious choice for ambitious founders, today a growing number want to make drones, robots, ships and other advanced hardware. 'What's going to be the next big thing? What smart, young people want to work on,' Friedman said, adding that he expects the revenue to eventually follow the investments. 'I'm quite optimistic that investors are predicting the future correctly.' Chapman writes for Bloomberg.
