This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Covestor: Time to Buy Coca-Cola

By Sean Hannon, CFA, CFP, of EPIC Advisors from

When analyzing a company's value, I follow an exacting process. I read all the data available on the company and its competitors, analyze the footnotes and financial statements, and make multiple adjustments to the reported income statement and balance sheet. This process often enables me to derive an accurate view of what lies at the heart of the company as opposed to accepting management's reports at face value.

Once I have normalized for my adjustment, I derive fair value using seven different earnings methodologies and then work toward one consensus number.

Even though I have analyzed all relevant information fairly and objectively, I still need a discount factor that reflects the possibility that my analysis is flawed.

To create a margin of safety, I only buy the company's stock if I can purchase the shares at a 20% discount to fair value.

When I apply these steps to making an informed investment decision, many stocks fail to meet my requirements. Most well-known companies that operate strong franchises sell at a premium that reflects both the value of the company and its position in the market.

As often mentioned in my weekly newsletter EPIC Insights,this usually forces me to consider lesser-known companies or those facing serious business problems.

However, I occasionally find an opportunity to purchase a solid company at an attractive price level. This week I have found such an opportunity with Coca-Cola (KO - Get Report).
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KO $41.10 0.23%
AAPL $111.56 0.70%
FB $92.90 -1.20%
GOOG $640.70 -0.12%
TSLA $238.15 -3.30%


Chart of I:DJI
DOW 16,821.12 +44.69 0.27%
S&P 500 1,977.22 -9.83 -0.49%
NASDAQ 4,729.9730 -51.2910 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs